ending a mortgage early, admin costs

Poppycat

I am buying a new house (not new build) hopefully soon to complete. We have lived in our first house 17 years, never missed a payment, never late. I am having a new mortgage with a different company but I am annoyed that once again companies seem to thing us mear mortals can be fleeced when we changed.

Not content with stamp duty, selling house, searches, solictors, brokers fees (dded to mortgage), new mortgage fee etc I now going to have to pay £175 as Halifax claim "repayment adminstration fee".

I find this rather unreasonable sure I dont mind paying something but £175 for ending a mortgage.

Poppycat

I have just seen this on goggle

http://money.guardian.co.uk/experts/mortgage/story/0,,1954114,00.html


Q We are due to make the final payment on our Halifax repayment mortgage in January. According to our latest statement we must pay £175 as a repayment administration fee and £50 as a deeds despatch fee.I seem to recall reading that there is a way around paying the deeds despatch fee. Could you tell me what this is, please?
Also, is the repayment administration fee justified and fair? I don't have any of the original documentation telling me this fee would be charged. We have paid off our 25-year mortgage in just over 13 years. Could this be why we're being penalised?

A It's not for me to say whether the repayment administration fee is justified and fair, but what I do know is that Halifax is not alone in charging such a fee. Most lenders make a charge when a mortgage is repaid - whether early or at the end of its term - and details of such fees are usually given in literature about charges that lenders are obliged to provide. So no, the Halifax isn't picking on you and you are not being penalised for paying your mortgage off early.You are right, however, that there's a way around paying the deeds despatch fee, which is charged by practically all lenders for sending you the deeds to your property.

Also this
http://business.timesonline.co.uk/article/0,,9553-2113910,00.html

Knudsen took the case to the ombudsman. An adjudicator at the FOS found that Halifax did have the right to levy a charge because it was stated in the small print, but said Halifax had been unable to prove that £150 was what it had cost the bank to close the mortgage account.

The Financial Services Authority is currently investigating exit fees because its rules say lenders have to “treat customers fairly” and questions whether they are actually doing that. It is due to make an announcement in the summer.

Poppycat

Okay so has any succeesful challenged the lender about there excessive charges and won?

I think its unreasonable charge

herbiesjp

Hi Poppycat

Have a look at the following thread, it may help:

http://forums.moneysavingexpert.com/showthread.html?t=100358&highlight=early+repayment+charges

HTH

Poppycat

Thanks for that, so I am going to complain about that.

I was never told about any charges when I changed to a repayment when I sold my endownment 3 years next Jan, having been missold it in Nov 1989 by Halifax in the first place.

regularsaver1

The fees appear on your annual mortgage statement

every lender charges a fee

Leon_W

I was trying to think of an anology to compare it with and found it quite difficult to be honest, the nearest I could come up with though is this....

You go into a car showroom and purchase a new car, on enquiring about the running costs you are quoted £100 pounds for a service.

If you keep that car for 10 years and return in 10 years time to the garage to get it serviced, would you still expect to pay £100 ? Probably not.

I said it was poor at the outset but it kind of makes my point. Costs invariably go up and a closing admin fee is no different.

Are they excessive is a different matter. I think they are, and act as a disincentive to shopping around and moving your mortgage, which I guess is what the lenders want. I would much rather see them dissapear all together with the costs involved absorbed within the interest rate charged, this way it is much easier to compare each mortgage deal without worrying about who charges what when you want to move.

In the grand scheme of things, the Halifax fee is neither the cheapest nor most expensive so I'm not convinced that a complaint would get very far, but I suppose it doesn't hurt to try.

Poppycat

But I was never told that there was a fee it was only my solicitor who told me when he sent me a letter on how much I owe the BS. I don't dispute a fee being paid, however it should be reasonable. I do think it bares any relation to the actually costs, surely I have every right to challenge it and not lay on my back and take the fall. It seems us home-owners are regarded by all to be soft target for rip offs

I also believe as it has nothing to do with the actually costs as mentioned, but more like to prevent customers from going else where. I don't jump ship at every opportunity, I had the same BS mortgage for 17 years, I only changed because I was miss old an endowment.

I think the whole process sucks, and another reason to extract as much as possible out of us gullible home-owners, £175 is a hell of a lot on my very modest income. If it wasnt for my respective parents I wouldn't even be able to afford to move because of the 5k moving costs. I am only moving because I have no choice because of my daughter problems.

I wouldn't go else where if it wasn't for Halifax messing me about with a broker and rescinding on the full amount I wanted to lend.Fortunately two other lenders were interested.

It probably isn't the most compared with others but that doesn't make it right, the charges should be reasonable just like the other bank charges. We dont seem to have any say on what goes on, I am even having problems getting to see a survey I paid £280 4 weeks back, unbelievable.

regularsaver1

To be fair though Poppycat - the fees are on the annual statements - I have seen them.

They state the amount owing, £175 early discharge fee, and £50 if they hold your deeds and you require them

They are also on the redemption statements that your solicitor has applied for. Your broker would have known that this fee would have existed, did they not mention it when applying for the correct mortgage amount?- you can ask for a copy of this redemption statement

Halifax have not been a BS for some time and are a bank. They are not the only lender to charge such a fee, and so be prepared if you change mortgages in a few years, to pay again

Can complain, but I think they they will saw you were informed in writing

Poppycat

I havent ever seen this fee mentioned and even IF it still was, it should still be reasonable, even the FSA have stated this and are at present looking into it. We just seemed to have to put up with it like it or not, well I wont because I think I should have been told from the onset.

Whether the fees were mentioned on the yearly statement is neither here nor there, why wasnt this mentioned to us at the time of applying?

Noz

This has been mentioned many times on the board, if you able to see what fees were quoted on the original mortgage offer the Halifax (or lenders in general) is likely to refund the difference to you - dealing with this in writing seems to bring better results.