can you 'haggle' with mortgage lenders?

Miss_Penny_Pincher_2

Thanks.

Apologies for harking on but I think it would be helpful for people considering a re/mortgage to be able to see up front at a glance what the exit fees are prior to going to a mortgage broker / receiving the offer should they wish to do so to make their own comparisons.

Would prevent a lot of resentment / I never heard of them type responses.

silvercar

Miss_Penny_Pincher wrote:

Thanks.

Apologies for harking on but I think it would be helpful for people considering a re/mortgage to be able to see up front at a glance what the exit fees are prior to going to a mortgage broker / receiving the offer should they wish to do so to make their own comparisons.

Would prevent a lot of resentment / I never heard of them type responses.

Problem is that people need to know what the exit fee will be when they need to remortgage, not now. Without a crystal ball we can't know.

UK007BullDog

That is why they are currently being investigated by the FSA and Co. As they are not fair.

Miss_Penny_Pincher_2

That's good news UK007Bulldog

silvercar wrote:

Problem is that people need to know what the exit fee will be when they need to remortgage, not now. Without a crystal ball we can't know.

Sorry silvercar but this doesn't make sense to me. I do believe that if signing a contract for a mortgage it should state the exit fee which shouldn't suddenly shoot up just before redemption!

To use a completely different example... my house is leasehold but it states that for the next 985 years my lease will be £65 a year with it increasing by £15 every 25 years. Why should a mortgage contract be any different? £90 when you sign, £175 next year, £250 the year after... :eek:

UK007BullDog

Silvercar is correct PennyPincher.

Currently The Key facts document only gives the cost of the exit fees when you take the mortgage out. However they say on the document that it is an estimated cost. The lenders are leaving the door open to charge the fee in the future whatever they want.

Some people have £80 on their documents for the mortgage they took out 2 yrs ago, but now the fee is £225. So someone who takes the mortgage out now it states total fees £275 and if for arguments sake the deal is a 5 yr fixed the fee could then be in 5 yrs time £750. That is not fair. Is a cash cow for the lenders and makes comparing mortgage deals difficult. That is why its being investigated but currently this practice is legal.

jubblinsm

We have recently changed mortgages & I too was shocked not by having to pay the exit fee just that it was about £ 75 - £ 80 on the leaflet I got when taking out the mortgage but less than 2 yrs later (there was no tie-in) it shot up to around £ 225 with no prior notification or update with the annual mortgage statements!

I have read the previous threads and that it's been mentioned it is being investigated by the FSA - is it worth registering with them if you have had this happen to you?

It is getting to the point when you add up the set-up and get out fees whilst the rate is good (not always the cheapest) and your saving money each month, if you average out the costs you're know better off over the period except maybe to have some stability rate wise etc.

UK007BullDog

No, you do not need to speak to the FSA. They are aware and it happens to every mortgage holder. That is another reason to maybe fix the mortgage for longer due to all the remortgaging costs. 1x 5 yr fixed is cheaper in the long run than 2x fixing/remortgaging, especially if the rates go up? If the mortgage is portable then it should not be a problem to fix longer.

dunstonh

I have read the previous threads and that it's been mentioned it is being investigated by the FSA - is it worth registering with them if you have had this happen to you?

Not really. They have the data they need and will be in consultation with the lenders.

The reason they have to leave the fee unspecified is commercial and totally understandable. If the fee was set at £100 now then in 40 years (the typical length of a first time buyer mortgage) that £100 would be worth £24 in real terms. They need to allow the charge to be increased over the years to reflect inflation.

However, the fee is also being used as a blocker to increase costs in moving to another provider and encourage the borrower to remain with their existing provider and that is part of the area that is being reviewed.

It isnt guaranteed that the FSA will consider the fees unreasonable. There is legal work, postal costs, time and administration involved. It is possible that they would could consider £250 acceptable for the work done but warn against further increases. The outcome will not be known for a while.

Rick62

If you have an illustration (or schedule of charges) when you took your mortgage 2 or 3 years ago saying that the deeds release fee would be, say, £75 and now that lender is asking for, say, £225, then you could make a formal complaint to the lender, as there is no justification for that increase.

I have had clients who have complained and been successful in having the charge reduced. It is a bit of hassle and you may need to be a bit persistant but apparently the lenders are not keen to test this and so will often settle.

regularsaver1

A&L charge £295