Remortgage: completion date and ERC

James_H

I have an Abbey two-year deal about to revert to SVR in a couple of months and so searched the market and found the ideal mortgage for me.

Abbey seem to have an unusual scale of early repayment charges, starting at zero, rising to the full amount just before the end of the two years, then dropping to zero. What I don't want to do is pay the ERC and so preferably complete the day after the existing discounted period ends.

When remortgaging, how much choice do you have over the completion date?

Another question relates to the release fee from Abbey. Now that they send out a list of charges with their statement, I know the current fee is a steep enough (but not A&L rivalling) £225. I expected there to be some fee back in April 2004 when arranging the mortgage but there is nothing with the initial mortgage documentation stating what the fee was then, and not even anything in the T&Cs that there could be one charged. Anyone know what the fee was at the time?

Thanks,

James

Barney088

The key to this is talk with your solicitor and get the date set up when you want, you are in complete control provided you keep all parties infomred (you and the solicitor, the new and old lender)

As for the fee, I bet they sneeked it in somewhere, certanly since Nov 2004 most offers (if not all) will take a similar format and there will be a section on "what if I don't want this mortgage anymore" which will cover all the fees involved. I don't know what their fee was back in April 2004 but they will have covered it. They were obilged under MCCB (voluntary conduct agreement prior to the Financial Service Authority) to tell you annually about the fees for various things, they should have sent you a leaflet every year, I think this is right.

James_H

Barney, thanks. I will be going with a free legal service as part of the remortgage so I guess it is something worth adding to the application form.

I have had the annual leaflet, the first arriving in Feb 2005 with the £225 fee shown as applying from May that year. Fair enough that they keep you informed regularly. Just poor practice then that the redemption fee would not be disclosed at the outset.

herbiesjp

James_H wrote:

Barney, thanks. I will be going with a free legal service as part of the remortgage so I guess it is something worth adding to the application form.

I have had the annual leaflet, the first arriving in Feb 2005 with the £225 fee shown as applying from May that year. Fair enough that they keep you informed regularly. Just poor practice then that the redemption fee would not be disclosed at the outset.

Hi James - don't lose heart. Just because they may have made you aware of the fees annually, does not necessarily make them fair. Whilst having a fee to close the mortgage down may be justified, th epercentage increase would also have to be justifiable and reasonable.


Have a look at the following thread and it should give you some pointers:

http://forums.moneysavingexpert.com...ht=closing+fees

Aiadi

To the OP, I hope I'm not hijacking this thread- I also have a mortgage with Abbey and am past the discounted period, and onto SVR (5.5%). I am going to remortgage (you may have noticed from 2 other threads in this forum) and also have received the redemption statement from Abbey with £225 repayment fee on it.

I too can't find this fee mentioned anywhere in my original T&Cs (I took out the mortgage in November 2002). It is not an early repayment charge because I am way past the discount period. On asking an Abbey customer service person yesterday I was told that I would be charged this fee whether I remortgaged today or in 10 years, and he called it a 'handling' fee. Other mortgages seem to have a fee of about £90 - 100 for closure of a mortgage, so this feels very steep in addition to the fact there was no mention of it anywhere in their T&Cs. Is there anything we can do to bring this down?

James_H

Herbiesjp, I have seen that other closing fees thread and I think I will challenge Abbey to justify the fee when I close the mortgage.

Aiadi, I'm glad it's not just me who cannot find anything in their original documentation stating they can charge a significant fee on exit.

I have no objection to them charging what is reasonable. In a business context, it is up to them what to charge. They have had to pay for changing their statements to first the multicoloured 'abbey' logo, then getting rid of the nasty Courier font and finally adopting the Santander logo. It's just mean that the charge has been sneaked on us without first telling us. :mad:

Back to the original question though, does anyone have a record of what the actual exit fee was in April 2004, other than zero as implied to Aiadi and myself? Browsing the net I have found both that it increased from either £99 or £180 in May 2005 up to the current £225.

Barney088

I'm not sure that it matters what the fee was in 2004. I think all lenders (certianly not found one who doesn't yet) have their fee scale as a movable feast. A fee in 1969 of 3shillings and sixpence to return your deeds would not be appropriate today.

THere has been alot talked about these fees in the trade as it is a "stealth" cost. In theory Abbey could say that this fee is going to be £1000 from 2006 and you'd be stuck with it.

Now your question, I don't know Abbeys bt I have dug out an old offer of mine (not Abbey) and it too doesn't speficically mention it BUT the offer points out hat there is a document attatched which forms part of the offer, their General Offer conditions and another on the standard fees and charges.


If you care, the background was that in the old days Deeds were actually moved in paper format and each company would have their own seal and impress or wax seal the deeds to confirm they didn't want them any mre, the deeds release fee covered the man hours that related to this task. Now deeds are sent electronically and taken ownership by this format. Paper copies are becoming a thing of the past. Boring, isn;t it?

Aiadi

Barney088 wrote:

If you care, the background was that in the old days Deeds were actually moved in paper format and each company would have their own seal and impress or wax seal the deeds to confirm they didn't want them any mre, the deeds release fee covered the man hours that related to this task. Now deeds are sent electronically and taken ownership by this format. Paper copies are becoming a thing of the past. Boring, isn;t it?

Very interesting Barney! I think I'd rather they did the whole wax seal thing instead of an email if I have to pay £225 for it!

xlt_hunter

Please, I am in the same boat - I am remortgaging away from Abbey and have been told about the £225 fee - this wasn't in the orginal T&C that I've signed up for.

Edit: I have a copy of the 2005 and 2006 Fees - both showing as £225 for the work to cover deed release on closing of the mortgage.

It just unfair having to fork out for something that wasn't even mentioned in the orginal contract and I kept every paperwork for the mortgage right from the start. I need to sit down and reread the paperwork again.

Different thread with the same problem with the same lender
http://forums.moneysavingexpert.com/showthread.html?t=116268

M

xlt_hunter

They know how to rub it in

http://www.anbusiness.com/services/how_much_will_it_cost.shtml

For businesses with Abbey its £75!!! not the £225 (Under Admin Fees)

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Found this while hunting around on google/moneyfacts
http://www.moneyfacts.co.uk/news/news.asp?q=Deed+release+fee&search.x=0&search.y=0&offset=30

ABBEY INCREASES MORTGAGE FEES (LSE:ABBY)
Abbey is the latest lender to hit customers with higher charges for switching mortgages or repaying early. Previously, Abbey took two closure fees - a £99 redemption administration charge, plus £80 for releasing the deeds. Now it will demand a combined fee of £225.
Financial Mail on Sunday page 22 - 1.5.2005.

~ So it started as £179 and jumped upto £225, just the info I need now... Anyone got a copy of the fees on abbey paperwork for 2004?

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http://www.investorprofit.com/mortgages/mort-07.html
Who's Charging What?

Abbey is the latest to raise its exit fee. The amount will increase by 25% to £225 so borrowers who are locked into fixed-term loans have no option but to pay this increased fee if they want to remortgage with another lender when their deal ends.

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And in 2001 it was £85
http://www.fool.co.uk/news/comment/2006/c060317d.htm?ref=foolwatch

TangentMan

Most of the lender's cover it by referring to either generic T&Cs or Tariff documents / leaflets.

If you can prove you never received one then you might have a case for saying you never expected to pay it.