Mortgage company charges

wendylc

My buildings and contents insurance is up for renewal on the 1st of december.
I received a letter from my mortgage company SPML, telling me it was up for renewal (which we allready knew about),and at the bottom of the letter it said this:
Please note that a charge OF £25.00 will be applied to your mortgage account on receipt of an acceptable policy schedule to cover the administration of vetting the policy as suitable to SPML.
As this charge will incur interest charges,you may wish to pay by cheque.
I have phoned my insurance company and asked them to send out the new policy asap,then phoned up SPML and they said they can do this ,but because we only remortgaged in April this year we have got away with it this year but next year we have to pay it.
Is this true because my father said they are not allowed by law to look at you private and personal affairs. Please help.:mad:

regularsaver1

Unfortunately some lenders do this

Because you have to insure the buildings that they have a mortgage on for you

Ian_W

They can't insist you take out their insurance but are entitled to insist [they have an interest in a share of it, after all] that you take out buildings insurance that is acceptable to them and can charge you an admin fee for "checking" this.

Some insurers have in the past offered to pay this fee for clients. As not as many lenders make this charge these days I've not heard any insurers advertising this recently but it may be worth checking with your insurer whether they will pay this back to you.

I'm afraid your Dad is off-beam, insuring the building isn't your private affair as the lender has a financial interest in it, so if you didn't insure their money would be at risk if anything bad happened.

salanddaz

£25 is the usual cost from what I have seen, from a mortgage point of view they need to make sure the policy you have is insuring your property for enough. As they have the mortgage on it and in a way its their house until you have paid up they need to make sure the property is insured properly.

So it may sound harsh but nearly all high street lenders do it and unfortunately I don't think there's much that can be done.

wendylc

Thankyou very much for your replies, at least I know now they is nothing I can do. I just wanted to make sure.:T

PThomas_2

Direct Line used to offer to pay this for you. We now use them for house, buildings and both cars as well as breakdown cover.