Two Mortgages one with a tracker

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frenchfancies Posts: 116
Hi guys would appreciate any advice you can give me. My mam has just retired and is hoping to pay off her mortgage but UB is being very difficult and seem to be going back on their word. Her situation is 1st mortgage taken out in 2002 for approx. at a variable rate of 4.75% at the minute approx. 2nd mortgage taken out in 2007, this was a tracker mortgage with an interest rate of 2%. Was advised to take this out over a variable rate Wants to pay off first mortgage and continue to repay 2nd. Both mortgages were taken out with First Active and when they were taken over all the accounts moved to Ulster Bank. Mam was told that at any time she could pay off either one of the mortgages, Ulster Bank are now going back on that and say that she must pay off tracker mortgage first. These are two different account numbers but UB claim that the 2nd tracker mortgage was a top up when she states it clearly wasnt. She has currently requested copies of terms and conditions and is awaiting them. But are the bank right can they demand that she pays of the 2nd first? Sorry if this is long winded but any advice would help. :wv :wv :wv :wv
Anne Cordelia Shirley Posts: 4731
It'll depend on the contracts. Also, you should note that as Ulster Bank aren't one of the State covered institutions they are under no political or legal pressure to act fairly. There are penalties associated with paying off any loan earlier than the contract states and as trackers are costing banks a lot of money I can see why they want to get rid of that mortgage first, instead of the other loan which they are probably going to make more money on. Your mum might have been told she could pay off the mortgage at any time, which she can, but in the contract she signed there will have been penalties for paying it off. Anyone can pay a loan off early, but it is breaching the contract they signed up to and the bank are entitled to enforce particular terms and conditions on such repayments.
mamasarus Posts: 831
Could you put up a post on askaboutmoney.com someone on that might have specific advice there. But don't let your mam hand one penny to the bank without getting some independent advice. Bottom line is the bank will try to bully her to keep the variable, and get the tracker off their books. But unless it's in a contact somewhere I doubt they can force her. Can she ask the solicitor who handled the mortgages to review the paperwork? Best of luck
frenchfancies Posts: 116
Thanks a million guys for all your advice so far. My fear is that mam will be bullied into this and she will take out a loan in order to pay the two off when she doesnt actually need one :wv :wv
Tir na nog Posts: 740
Well the 2nd mortgage isn't a top up if she has two mortgages at two different interest rates. With variable mortgages i thought you could pay additional amounts or pay it off early without incurring penalities. I definately would not pay off the tracker one, pay off the variable one first and maybe get your soliciter or financial advisor to look over the mortgage contracts for you. I think the bank are just being smart and trying to get rid of another tracker mortgage holder, don't be bullied and find out all the facts before paying of the tracker mortgage. I would definately advise against getting out a loan to pay off the mortgages as you would be paying this off at a much higher interest rate than the mortgages and would be counter productive.
jezabelle Posts: 607
My husband works with UB, assuming they are separate mortgages, she defo should only pay the variable one back do not touch the tracker one if she has to choose! Trackers cost the banks money at the moment that’s why they load the pressure on to pay them back over anything else. I’d advise her to call her manager to speak about it and maybe arrange a meeting that you could attend. I’d even make an offer when it comes to paying the tracker one off like say it’s worth €100,000 I’d say I’ll pay it back but only for €80k! You'd be surprized what they might do these days! If they say no then I'd wait to pay it off for a few months!
frenchfancies Posts: 116
Once again thanks so much for all your advice with this. I fail to belive the bank are correct in their demands and I suppose before we fight fight fight I wanted to know if we had any legs to stand on in our arguements :thnk :thnk
Bonnie Parker Posts: 2670
[quote="Anne Cordelia Shirley":sz21t3h7]It'll depend on the contracts. Also, you should note that as Ulster Bank aren't one of the State covered institutions they are under no political or legal pressure to act fairly. There are penalties associated with paying off any loan earlier than the contract states and as trackers are costing banks a lot of money I can see why they want to get rid of that mortgage first, instead of the other loan which they are probably going to make more money on. Your mum might have been told she could pay off the mortgage at any time, which she can, but in the contract she signed there will have been penalties for paying it off. Anyone can pay a loan off early, but it is breaching the contract they signed up to and the bank are entitled to enforce particular terms and conditions on such repayments.[/quote:sz21t3h7] Obviously it comes down to the contracts - but they are still with the remit of the financial regulator etc, so it's not as if they can do whatever they want. There are some loans that have penalties for early payment - but most do not - I have paid several loans off early and have never received a penalty & there is no penalty for paying my mortgage early either. AFAIK there is very little evidence that the bank are accepting less money than is owing on the mortgage to clear trackers.
jezabelle Posts: 607
Bonnie there is very little evidence but UB are not Irish controlled and never will be and this makes paying them back with negotiations a tiny bit easier in a sense, sometimes!!
strawberries1 Posts: 1245
The banks are unreal. From your post it does seem clear that the bank have absolutely no right to demand that she pays back the tracker first but of course it is important that what your mam was told was actually put in writing by First Active. I wouldn't let this go and if I was you I would go with your mam to any meetings with the bank. They are so sneaky they are constantly been criticised at the moment for trying to take tracker mortgages off people.