First Active Mortgages

...advert on TV about how First Active (FA from now on) were making mortgages 'the way they should be', I was happy to find they had a great deal on offer of a Bank of England tracker rate for two years. I grabbed the phone.

Calling them and getting through was straight forward enough, no major queue to wait through and a nice friendly chap answered the phone and took me through the details needed to complete the application. Now at ...
...than it was when I first took out my mortgage at the size it is at the moment, but more importantly, my part time occupation is actually a mortgage advisor, so I know what I am talking about with these thing.

He went through my income, and while I knew that it was a bit of a stretch on standard multipliers, it was far from impossible as my income is actually still quite good from my job. Also, I have a lodger and as well as that my ... more

Those of us with mortgages out there will know the feeling. Your introductory rate on you mortgage is coming to an end, you are about to be out of the dreaded tie in period so now is the time for those of use wise enough to steer clear of Independent Financial Advisors (just DON'T get me started..) start to trawl the net to try and find another fantastic (if we are lucky) mortgage deal to transfer to in the hope of saving a bit of money.

So, in March this year, that's exactly what I did. After seeing the advert on TV about how First Active (FA from now on) were making mortgages 'the way they should be', I was happy to find they had a great deal on offer of a Bank of England tracker rate for two years. I grabbed the phone.

Calling them and getting through was straight forward enough, no major queue to wait through and a nice friendly chap answered the phone and took me through the details needed to complete the application. Now at this point, I should point out my circumstances. I am student, so my income is a lot less than it was when I first took out my mortgage at the size it is at the moment, but more importantly, my part time occupation is actually a mortgage advisor, so I know what I am talking about with these thing.

He went through my income, and while I knew that it was a bit of a stretch on standard multipliers, it was far from impossible as my income is actually still quite good from my job. Also, I have a lodger and as well as that my guaranteed student loan so while there would have been some further underwriting involved, my type of income and the fact that I have about 40% equity in my flat I knew that I would underwrite it in the same situation. He was far from sure however, so put me on hold for a good while and then came back to say that his supervisor had advised to go ahead with the application, so he did.

The call lasted 18 minutes. Great I hear you all cry? Well no, not really. For a start, the mortgage industry has gone through some MAJOR regulatory change in the past six months, and as I have to adhere to them I know exactly what should and should not be done, and my calls last a minimum of about and hour and that's if I am lucky. The words 'Financial Services Authority' was not mentioned once, the way in which the 'non advised' route of choosing the rate that you want was skimmed through. The key facts of their mortgage Services (also known as the Initial Disclosure Document) was not explained to me and the Key Facts of This Mortgage (new name for a quote) was not explained to me, and both of these are regulatory requirements. This may have been because the advisor was aware of my background but at the end of the day, I was still a member of the public to him so should have got the correct process. On another note, I was asked about some of the mortgage related products they offer but this was very much an after thought and not to the standards of my work and the actual requirements of the FSA as a lot of these insurances (eg Unemployment cover) are MEANT to be put at the forefront of the application so make sure that customers are aware of it.

So anyway, after that was done I received the application pack pretty quickly so filled it in and sent back the required documentation (three months bank statements, identification and my payslip). However, when I got a call from them, they told me that they couldn't approve my loan. So, once again I explained my circumstances and the guy on the other end of the phone went to his supervisor. Once again, I got the answer I was looking for and was told that as long as I could send in a recent mortgage statement to confirm I wasn't in arrears, it would be authorised. A bit of a pain as I had to wait for it to be sent to me, but understandable. So, once I had this I duly sent it on and low and behold, I had it authorised just like they said.

Great I thought. So, the survey was organised which my flat easily passed easily, and all I had to wait for was the offer to come out. But hang on, it wasn't correct. I have an interest only mortgage however they had set it up on a repayment basis which was no use at all. So I phoned them. To my absolute surprise, I was told to just manually change it on the offer and then send it back to them and it would all be fine. Bringing this back to the regulations, this is simply not allowed. If there is what is known as a 'material change', meaning that if changing anything will affect the monthly payment, the overall cost of the mortgage, the term, or in otherwords has a financial implication, then they really HAVE to send out a new one. And think about it, would you want to sign a legally binding offer that meant my payments would be way higher than they should be?? The only thing is, when I pointed this out I was told that my rate would only last till the end of the next week so there really would not be time for that. "Hang on" I said, "but it says at the very top of my offer letter that it is actually valid for 3 months?" Well its not I was told.

So, after all that I have decided that I just cannot take out a mortgage with a company that is blatantly flouting so many legal regulations. So I have told them that I am not proceeding. Here comes the final sting from them though. When I said this to the advisor, she informed me that I would have to pay a £99 withdrawal fee for not going ahead with the mortgage however I have never at any point been told about that. I plan to write a letter to the company to explain that the reason I am withdrawing from the mortgage is that I lost all confidence in them and if they still try to charge me it, I will be taking it a lot further to the regulators.

I obviously cannot comment on the workings of the mortgage once it has been taken out however having worked for the Royal Bank of Scotland in the past, I can honestly say that their mortgage operations really did run pretty smoothly and I very rarely came across anyone asking me about problems they were having so I don't doubt for a second that if I had proceeded, things would have been fine.

So, to summarise my opinion of First Active, I would say that while their rates really are very good, I for one would never want to give my business to a company that is so inept at sticking to mortgage regulations. Yes, I may have the advantage of knowing that but let me write down a few things that you SHOULD expect from a company taking you through a mortgage application and do not accept any less.

1 - Firstly, they should at LEAST be telling you about the regulations and they should be offering you the option of 'advised' or non-advised'. If you are not sure what rate to go with, get the advice.

2 - The need to fully explain the Key Features Illustration (KFI) to you so that you understand the full costs of the deal you are taking out. All lenders have to produce these so that they look the same for customers to compare them.

3 - If they get things wrong or you want to change something, make sure you get NEW documents out. Do not accept them telling you just to change it yourself and initial it.

4 - Don't be afraid to argue with them, they may not be right you know.

And that's that. I am giving First Active 2 stars but only just, and that's only because of the rates they offer. Not recommended though…..

drew
 

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