Redemption is it legal

Joanna02_2

I have a joint mortgage with my expartner .He left and I have been paying mortgage on my own for 8 years. Building society is aware of this.I have tried to do transfer of equity but building society refused. Ex partner back on scene (not together)and we have agreed to sell the property {no choice too many debts} Last July I signed up for a fixed rate deal which ends July 2007 building society say if property sold will have to pay £3000 redemption. However the joint mortgagee never signed up for the scheme only had my signature can they make me pay?

cattie

If it's a condition of the mortgage then you have no choice as it's something you signed your name to. It doesn't make any difference that your ex partner didn't sign.

Can you not put off selling the house untill next year to avoid the redemption fee?

homer_j_3

will you be looking to buy again after sale of this property? can you transfer the mortgage onto the next property thus avoiding this or substantially reducing this?

Joanna02_2

No will not be buying another property. As I am skint

homer_j_3

ok then you are stuck with it, sorry.

With regards to debts, if they are becoming difficult to keep payments up etc then I would recommend debt counselling before selling the family home. Visit the debt free wannabee thread for guidance on what is best there before you make any rash decisions.

matto

I presume rather than remortgaging you just agreed with the existing mortgage provider to move to a fixed rate deal. I suspect they only need one signatory for that to be effective and binding.

lisyloo

It would seem sensible to wait before selling.
If you are living in the house alone could you take in a lodger?

davelewis

Do you know we have just covered this in Land Law - mortgages and redemption penalties. Apparently they are illegall!!!! I had one on my old house and paid it and was astounded to find in my Law Degree that redemption penalties are illegal!! There is something called the equity of redemption - part of this states that you should be able to redeem your mortgage clear of any restraints (ie. penalites).

My law lecturer said that if you challenge the bank under this equity of redemption they will not pursue the issue and go to court as they do not want the bad publicity - that is why he said there has never been a precendent court case - the banks are too scared to pursue it.

This is only my info from my law degree - please do check it out properly!!!!

But do hope this helps!

silvercar

part of this states that you should be able to redeem your mortgage clear of any restraints (ie. penalites).

I would guess that the above only applies if you haven't signed something agreeing to redemption penalties in return for which you get a non-standard deal (eg fixed rate etc).

u144675

I'm going through a similar process - we have one and a half years left of a five year fixed rate but are selling our house due to costs. We had to move due to a new job and the mortgage provider wouldn't transfer our mortgage to a new house as our income had initially dropped and they wouldn't lend us the same amount. Because of this we had to take out a mortgage with a different bank and are now facing paying a £4,000 redeption penalty. We are thinking of seeking legal advise as it seems totally unfair as we wern't given a choice.

AndrewSmith

With respect you did have a choice.

You had the choice of taking the product or not and signed in agreement to the terms and conditions of the mortgage and it's penalties. It was not the fault of the original lender that you had to change jobs and no longer fitted their criteria, it is also not the fault of the new lender.

Never forget that a mortgage lender does not have any obligation to lend you anything, and they do not have to accept you for a mortgage if they feel unhappy with the risk of lending.

You signed a declaration agreeing to pay the redemption costs for early repayment within the set timescale. You have had the benefit of, I assume, an enhanced product for this time and therefore you have to pay the penalties laid out in the terms and conditions of the mortgage. This will have been overseen by a solicitor and you will have signed contracts to this effect.

I'm afraid there is no case for the lender to answer.

Andy