Mortgage Exit Fees successes and failures

jon_boy75

£126 refund on a mortgage exit fee. Cheque arrived today, but in mine and my exes name!

Ah well, at least it was quick...now to request 2 cheques

tiptoes27

I have an 8 year term offset mortgage with YBS which has 2 years and 9 months to run. It was on a 5 year fixed rate but have got to the end of that term and am now on variable rate. I have being overpaying the mortgage and now only owe £4400.00 and I also have a similar amount in the offset savings account. I was under the assumption that once I had passed the end of the fixed rate term, I would pay the mortgage off without any penalty, but then realised I had to pay an exit fee of £199.00 if I redeem anytime before the end of the eight years.

After reading some of the advice on here I wrote to YBS and said I wanted to redeem but leave a small amount outstanding until the end of the term. I was hoping that they would not want to encourgage that and would waive the exit fee. I have now had a letter back from them with a redemption figure and they suggest that I leave a balance of £100.00 on the mortgage and they will then calculate a small monthly repayment to take me up to the end of the term. So no success with YBS.

dunstonh

I was under the assumption that once I had passed the end of the fixed rate term, I would pay the mortgage off without any penalty, but then realised I had to pay an exit fee of £199.00 if I redeem anytime before the end of the eight years.

Which is quite normal.

So no success with YBS.

I think you have missed the point of this thread. The actual charge is allowed. However, what the FSA deemed wrong was where your contract said an redemption charge of say £199 but when the time came, they charged £299. The FSA said that the difference should be refunded. not the whole charge.

tiptoes27

Sorry - looks like I have posted it in the wrong place.

When I first asked for a redemption figure, I was surprised to see the £199.00 mortgage exit fee although I did then check and it was on my mortgage offer. I did some research on here and some members were discussing ways to avoid paying the fee by letting the mortgage run up to its term date. I could then redeem and not have to pay the exit fee at all. There were suggestions to leave a very small balance which would be uneconomical for the lender to adminster in the hope that they would waive the fee. The general cencus of opinion was that it would be worth writing to the lender to tell them my plans and see what they said.

dunstonh

tiptoes27 wrote: »

Sorry - looks like I have posted it in the wrong place.

When I first asked for a redemption figure, I was surprised to see the £199.00 mortgage exit fee although I did then check and it was on my mortgage offer. I did some research on here and some members were discussing ways to avoid paying the fee by letting the mortgage run up to its term date. I could then redeem and not have to pay the exit fee at all. There were suggestions to leave a very small balance which would be uneconomical for the lender to adminster in the hope that they would waive the fee. The general cencus of opinion was that it would be worth writing to the lender to tell them my plans and see what they said.

ahh, that makes more sense now. Not quite the same thing this thread is on about. Hence the confusion

Jalos

Claimed £220.24 back from Barclays/Woolwich but only received cheque for £108.03. Told that account was in joint names but I had paid £275 as part of divorce settlement to buy house from ex, the reason I had to pay the exit fee in first place! Barclays said they could not tell where money had come from even though from my personal account, via my solicitor in fact were quite rude and v unhelpful.

dunstonh

Jalos wrote: »

Claimed £220.24 back from Barclays/Woolwich but only received cheque for £108.03. Told that account was in joint names but I had paid £275 as part of divorce settlement to buy house from ex, the reason I had to pay the exit fee in first place! Barclays said they could not tell where money had come from even though from my personal account, via my solicitor in fact were quite rude and v unhelpful.

The problem with this is that the bank is correct. Had the mortgage been converted to your sold name before closure, then the bank would issue it to you alone. If it was joint on closure then the money is split that way.

W1zz

Had standard reply from A&L saying that the cannot agree to refund any part of the charge. Stating that the cost would have been detailed in the T&C I would have received when I switched products.

Time for letter #2, highlighting that the £295 charge is disproportionate to the true administration costs involved with closing a mortgage.

dunstonh

Time for letter #2, highlighting that the £295 charge is disproportionate to the true administration costs involved with closing a mortgage.

1 - you dont know the true administration costs
2 - they dont have to justify them
3 - if you think the fee is wrong then why did you agree to it in the first place?

A&L deals were always priced on cheap going but higher cost coming out and they used to market the fact that if you stayed with them on deal renewals you could avoid that fee until the end.

W1zz

The main reason I stayed on with A&L in 2006, was that when I asked for a Redemption Statement, they listed a £295 Redemption Administration Charge. So after comparing other mortgages and taking this charge into account, I opted to switch to another A&L product.

As it now turns out, the £295 Charge was incorrect as when I applied for the previous mortgage in July 2004 the Redemption Administration Charge was listed as being £195. (I have copies of this application)



So I'm approaching this from two angles. The first that £295 is not a justifiable 'Administration Cost' and is therefore being used as an exit penalty and also, that in 2007 I was given an incorrect redemption quote which effected my decision when looking to move products.

Worse they can say is no, but for the price of a few stamps, it worth a try.