mortgages - penalties

kceregra

Hi
Need some help. Got married 1 year ago and doing some finances at home now and I just finded out that my husband signed a mortgage deal with 7000 GBP penalty in case we change a mortgage. He use to pay 4.5 % for 2 years but now we are paying 6.5 %. Is there any way to change? because it looks like no matter what we do we will have to pay 7000 GBP. Please help - I am not english and all the finances here are still quite new for me but this penalty deal is just horrible

thank you

homer_j_3

Could you write out word for word what you are reading to say that you have to pay 7000 to exit the mortgage. You could be in an extended tie in period but that should not be forever.

If you are unable to do this, I would recommend a trip to a local mortgage broker for their opinion.

kceregra

It looks like forever. MY husband took this mortgage 4 years ago. First interest was 4.8%, after 2 years they changed it to 5.6%. recently I received a letter from them saying that last time they changed interest the forgot to add 7000 GBP fee to our mortgage so it looks like when we exit a mortgage we have to pay but also when we change anything within the company they want to charge us 7000 GBP. I really dont know whats going wrong.

Scott

I'd recommend you seek some professional advice on the matter, as it doesn't seem that you are being kept properly informed by your lender.

MortgageMamma

It's very unlikely that the 7,000 tie in would be forever. who is your mortgage lender? do you have a copy of the mortgage offer that they sent your husband or the quotation he got beforehe took the mortgage. If you do I can try and extract information to help you. scan it and email it to me on bossylisa@hotmail.co.uk and I will look into this and advise you.

MM

campari

Hi there - it sounds to me like you have a set rate of interest on the mortgage that is payable should you move elsewhere - this is called a redemption penalty/charge and is separate from the exit fee. The change of rates so far sounds like discounted periods that are expiring year on year. I too have this problem and am very cross that no-one seems to think it a money making exercise for the lenders. I have raised this query before: an example is my case where I have a 2.5 % discount for 12 months but during same period would have to pay 6% if I move the mortgage - so - what is the other 3.5 % for??? A lot of dosh for what?? My discount reduces incrementally but the penalty does not !! This seems to be an unfair term and should be looked at by the FSA surely. Meantime, you can only reduce your redemption if you can reduce the balance by paying more than your usual - if this is allowed on your deal. Suspect they do indeed, have you over a barrel like the rest of us. GOOD LUCK.