Final Mortgage Payment and fees

RNW2

Hello all,

I'm posting here on behalf of my parents who are a couple of months away from finishing their mortgage that is with Santander. They received a letter a couple of days ago that I've posted below. The gist of the letter is that they'll need to pay a fee to "cover your mortgage Account". Basically my parents want to know is it normal to have to pay a fee to finish your mortgage? Also they mention using a solicitor to "legally discharge our legal charge" or give the option of using them. Does this mean the fee they mention later in the letter or will this be an additional fee further down the line? The letter is below. Any advice would be greatly appreciated.

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Dear Mr and Mrs ........

I am pleased to let you know that your mortgage term is due end on 27/12/2010. Once we’ve received your last payment, we’ll write to you again to give you more details about the legal side of things.

In England and Wales you can instruct a solicitor to legally discharge our legal charge on your property or we can do this for you.

In Scotland and Northern Ireland you must use a solicitor for this.

If you have a secured personal loan linked to your mortgage, you’ll need to pay this back in full at the same time as your main mortgage if you want us to send you any Title Deeds we may have.

When we write to you again, we’ll then ask you to send us a payment of £225.00 to cover your mortgage Account fee along with your instructions or solicitors details.

Yours sincerely

Customer Service

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Thanks all.

R

dunstonh

Basically my parents want to know is it normal to have to pay a fee to finish your mortgage?

Yes.

If they check their contract/offer letter it will say it on there.

Does this mean the fee they mention later in the letter or will this be an additional fee further down the line?

Ask them.

glitter123

Sounds a bit odd to me. We didn't pay anything extra when we paid off our mortgage. I guess it depends on what the conditions say. We did have an endowment assigned to the mortgage which we didn't need to use and the BS just wrote to the company saying they no longer had an interest in the property.

dunstonh

Sounds a bit odd to me. We didn't pay anything extra when we paid off our mortgage.

Depends on the mortgage deal you buy. Typically, deals that have smaller/no fees coming out tend to have more going in or a higher rate (i.e. low fees/higher rate, lower rate/higher fees).

stuzhunter

Do check the terms & conditions of your mortgage loan. If these clauses are not there your parents do NOT have to pay. If these clauses are there and if your parents feel they are unfair they should contest these fees.

On top of interest on the amount you borrow, companies generally charge you for an initial set up/arrangement fee and final payment fees. It is a 'British' thing and all down to greediness by these companies. That's why they can afford to pay large commision to their brokers etc.

I have just had a similar situation when I paid off my car loan. I contested the final payment fee as I thought it was unfair and unjustified. I won my case.

shimano

Typical with Santander, my offer has the same. Can pay it at the start or defer to completion (with no interest charged on it)

hillcats

One point worth noting:

What was the amount of the MORTGAGE EXIT ADMIN FEE (MEAF) plus any other fees at the time the mortgage was taken out? I would strongly bet that they have raised this amount from the original amount quoted at the start.

I suggest you write to them and request to know the exact exit fees quoted when the mortgage was started and why have these increased (if they have... of course !)

Then ask them to justify the increases and why they are changing a contract !?


See here: https://forums.moneysavingexpert.com/discussion/394543

snowmen

check to see if you can keep the mortgage account leaving just a nominal amount in it - I know we will be doing this with our nationwide mortgage soon. We will leave £1 in the account and we will not be charged interest and we are able to borrow again on this account without all the normal application process.
Worth looking at if they are going to charge you for clearing your account fully.

RNW2

Thanks for all the advice and tips. It's much appreciated. I'll pass this back to my family.