In The Times today, the paper talks about an instance where a Northern Rock customer was turned down as he tried to withdraw an overpayment from his ‘flexible’ mortgage.
Many Northern Rock customers have flexible mortgages where they were told they could overpay on the understanding that they could later withdraw the money if they wished to, just by a simple phone call.
However, a Sunday Times reader who had overpaid £1 million on his £3 million mortgage tried to withdraw £25,000 and was surprised to be met with a series of questions on his incoming and outgoings before being referred to the underwriter.
Northern Rock customers have been warned that withdrawing their overpayments may no longer be an option.
Ian Gray, of independent mortgage broker Largemortgageloans.co.uk, told the paper:
“This is yet another example of lenders tightening criteria for borrowers unexpectedly. Many people took out those flexible deals with the promise that it was a place to park cash and they could get it next day with a phone call. There are now serious questions about whether they can get their money.”
It is important to check the terms and conditions of your mortgage to see what the requirements are for withdrawing overpayments.