Higher Lending Charges. Fair or Unfair??

VIGILANT22

Dan_1976 wrote: »

Subrogation, thats the one! lol you must be board! thanks

No I am working...:)

opinions4u

oatesdaniel wrote: »

Hi. In June 2008 I had to get a 95% mortgage.

No you didn't have to get a 95% mortgage. You wanted to buy a house. You didn't want to save up much in deposit. You CHOSE to take a 95% mortgage as a result.

Because of this, RBS charged me £2.5k as a higher lending charge on top of all the other fees for setting up the mortgage and the valuation etc etc

And they even told you about it before you committed to anything.

Does anyone know if these charges are legal or not?

Legal and openly advised to those CHOOSING to borrow money.

I believe this could be nearly as big as the Bank Charges phenomenon thats been going on the last couple of years because there are thousands of people that are being charged this fee

You mean the bank charges that have been classed as legal by the courts?

plus the interest on top of it, which is a lot of money. Please help anyone!!

You will only pay interest on top of it if you CHOOSE to borrow the fee instead of paying it up front.

Some lenders will use the fee to buy an insurance policy against the property value falling and you defaulting on the loan. Others will simply add the fee to their capital reserves just in case the housing market turns against them.

Since 2008 we have seen property values fall and we have seen an increasing number of people default on the mortgage commitments.

This rather proves the need for the charge to be applied to high risk loans like the one you took out.

Dan_1976

ALso note that when the HLC is borrowed some lenders will charge the SVR as as it normally takes you over the LTV limit of the product.