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Old 22.08.2011, 09:48
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Negotiating waiver of mortgage penalties

We sold our house and our current bank (CS) didn't want to mortgage us to the same level as our new bank (Valiant) so we switched mortgage providers. Unfortunately, this means that the 5 year part of my mortgage needs to be redeemed early and will attract penalties.

When we first enquired about this, it would have been about CHF7000, which is bad enough, but because the libor rates have fallen and so the differential is higher - it will now be about CHF15000. (New buyers of the house don't want it either - I tried - although we will share the penalty)

I'm going to meet them today to negotiate it and will try the usual tactics to negotiate it away...in order

1. I earn a good salary and I'm a good customer *smile sweetly*
2. If you had matched the terms of Valiant, none of this would have happened *smile threateningly*
3. If you waive the fee, I will invest the equivalent in a long term bond with you so you keep earning on the money
4. Least favoured - If you waive the fee, I will invest the proceeds of the house sale will you in savings (funds, bonds etc)

My question is - has anybody had experience of this situation and been successful? How did you do it?

Or anybody from the banking sector know how negotiable this usually is - and what would you do in my position? What works?

Thanks
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Old 22.08.2011, 09:55
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We sold our house and our current bank (CS) didn't want to mortgage us to the same level as our new bank (Valiant) so we switched mortgage providers. Unfortunately, this means that the 5 year part of my mortgage needs to be redeemed early and will attract penalties.

When we first enquired about this, it would have been about CHF7000, which is bad enough, but because the libor rates have fallen and so the differential is higher - it will now be about CHF15000. (New buyers of the house don't want it either - I tried - although we will share the penalty)

I'm going to meet them today to negotiate it and will try the usual tactics to negotiate it away...in order

1. I earn a good salary and I'm a good customer *smile sweetly*
2. If you had matched the terms of Valiant, none of this would have happened *smile threateningly*
3. If you waive the fee, I will invest the equivalent in a long term bond with you so you keep earning on the money
4. Least favoured - If you waive the fee, I will invest the proceeds of the house sale will you in savings (funds, bonds etc)

My question is - has anybody had experience of this situation and been successful? How did you do it?

Or anybody from the banking sector know how negotiable this usually is - and what would you do in my position? What works?

Thanks
I doubt you will get anything, they purchased a swop to cover the fix, somebody needs to cover the loss.
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Old 22.08.2011, 11:37
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Re: Negotiating waiver of mortgage penalties

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I doubt you will get anything, they purchased a swop to cover the fix, somebody needs to cover the loss.
That's the wrong answer thanks anyway though....
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Old 22.08.2011, 12:44
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That's the wrong answer thanks anyway though....
What you need to find someone who wants to borrow on the original terms without a 15k sweetener , I doubt you will.
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Old 22.08.2011, 12:49
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Re: Negotiating waiver of mortgage penalties

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(New buyers of the house don't want it either - I tried - although we will share the penalty)
Interesting...why would the new buyers share a penalty relating to your (in hindsight) poor choice of mortgage ? Just to help get the deal through, or ?
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Old 22.08.2011, 12:54
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Re: Negotiating waiver of mortgage penalties

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Interesting...why would the new buyers share a penalty relating to your (in hindsight) poor choice of mortgage ? Just to help get the deal through, or ?
Correct. We had three people who all bid 5% more than asking price for the house - I asked them to all submit sealed bids increasing their offers and made a 50/50 share of penalty part of the deal. One party increased the offer and agreed....two walked away
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Old 22.08.2011, 12:55
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Re: Negotiating waiver of mortgage penalties

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What you need to find someone who wants to borrow on the original terms without a 15k sweetener , I doubt you will.
Will let you know if I get a settlement from CS in an hour - I'll slink off embarrassed and never mention it again if I don't
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Old 22.08.2011, 12:56
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Re: Negotiating waiver of mortgage penalties

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Correct. We had three people who all bid 5% more than asking price for the house - I asked them to all submit sealed bids increasing their offers and made a 50/50 share of penalty part of the deal. One party increased the offer and agreed....two walked away
Looks like you found 1 mug, I doubt there will be 2, but hey this is CH.
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Old 22.08.2011, 13:00
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Re: Negotiating waiver of mortgage penalties

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Correct. We had three people who all bid 5% more than asking price for the house - I asked them to all submit sealed bids increasing their offers and made a 50/50 share of penalty part of the deal. One party increased the offer and agreed....two walked away

lol I know what I'd have said
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Old 22.08.2011, 13:09
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Re: Negotiating waiver of mortgage penalties

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lol I know what I'd have said
I know a similar case in the UK 15 years ago, my brother had bid first 210,000, then upped his bid to 215,000. The agents then asked for sealed final bids by noon on Monday, my brother decided to walk away. At 11.50 on the Monday the agent called his wife & asked when they were going to put in their bid, she said they were no longer interested. They ended up getting the house for 180,000, the seller needed to sell quickly.......
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Old 22.08.2011, 15:15
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Re: Negotiating waiver of mortgage penalties

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I know a similar case in the UK 15 years ago, my brother had bid first 210,000, then upped his bid to 215,000. The agents then asked for sealed final bids by noon on Monday, my brother decided to walk away. At 11.50 on the Monday the agent called his wife & asked when they were going to put in their bid, she said they were no longer interested. They ended up getting the house for 180,000, the seller needed to sell quickly.......
It was an interesting cultural point actually - the Swiss agent wasn't especially comfortable with my approach, but soon got the hang of it! Thing is - I sort of do this stuff for a living so its a matter of personal ego to me to push for a deal as I would in work The other point is that we are not moving for a year, so if it had backfired....I'd have had time to beat a graceful retreat and regroup!

Anyway - they signed so it worked
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Old 22.08.2011, 15:17
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Re: Negotiating waiver of mortgage penalties

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Will let you know if I get a settlement from CS in an hour - I'll slink off embarrassed and never mention it again if I don't
So how'd it go?
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Old 22.08.2011, 15:18
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Re: Negotiating waiver of mortgage penalties

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lol I know what I'd have said

You'd have looked into my eyes, heard my persuasive words and said "Where do I sign?"
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Old 22.08.2011, 15:21
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Re: Negotiating waiver of mortgage penalties

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So how'd it go?
30% reduction confirmed without any concession from my side (their fees, costs, margins etc), but he needs to talk to his boss about the rest (the lost interest) and my proposal / threat! So still open....
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Old 22.08.2011, 15:22
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You'd have looked into my eyes, heard my persuasive words and said "Where do I sign?"

is that swiss german for "bugger off"?
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Old 22.08.2011, 15:27
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Re: Negotiating waiver of mortgage penalties

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is that swiss german for "bugger off"?
Join the club.

Played hardball with a house we were keen on. But the structure of the deal - with the previous owner requesting "professional fees" in order to prevent a tax event didn't sit comfortably with us. We structured up a deal - but he wasn't happy.

We walked.

We didn't lose much sleep!
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Old 22.08.2011, 15:36
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Re: Negotiating waiver of mortgage penalties

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Join the club.

Played hardball with a house we were keen on. But the structure of the deal - with the previous owner requesting "professional fees" in order to prevent a tax event didn't sit comfortably with us. We structured up a deal - but he wasn't happy.

We walked.

We didn't lose much sleep!

same here, walked away from a couple of houses in the uk, and when buying our house here made it clear to the owner that we where not going to give them envelopes full of cash, or pay 10k for there 'antiques' etc etc

op must have a very special place for sale
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Old 22.08.2011, 15:43
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Re: Negotiating waiver of mortgage penalties

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same here, walked away from a couple of houses in the uk, and when buying our house here made it clear to the owner that we where not going to give them envelopes full of cash, or pay 10k for there 'antiques' etc etc

op must have a very special place for sale
Wasn't quite like that! And it was correctly put in the contract....so no envelopes or cash or tax dodges!

One of the buyers wanted to pay cash so didn't need to take over any of our mortgage (which is the "norm" here) so we'd need to pay the penalty and another needed a mortgage so was happy to take some over....

So in order to make the comparison clear, we just asked for a clause on contributing 50/50 to whatever costs were incurred - all totally above board.

In fact, I think it was more fair than just increasing the price because if I manage to negotiate it away, then the buyer will benefit too
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Old 22.08.2011, 15:48
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Re: Negotiating waiver of mortgage penalties

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So in order to make the comparison clear, we just asked for a clause on contributing 50/50 to whatever costs were incurred
I would hardly expect your mortgage costs to be part of that... and if you tried to pull that one on me I'd tell you to stick the house where the sun don't shine...
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Old 22.08.2011, 15:55
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Re: Negotiating waiver of mortgage penalties

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I would hardly expect your mortgage costs to be part of that... and if you tried to pull that one on me I'd tell you to stick the house where the sun don't shine...
Well - the discussion was all about that and it was a clear statement in the contract.

OK - Mr Macho - so if I said, I want the house price to be CHF5000 higher to buy it, is that better than saying "If I can make this go away, neither of us pay anything?"
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