Mortgage Exit Fees discussion

isayoldchap

Deleted_User wrote:

Is £99 still OTT - if the cost of handling the paperwork is about £35 I just wondered if anyone is claiming back on these smaller amounts?

I have had 2 Abbey mortgages since Britannic money - one was a remortgage from Britannic and the other was when I moved house and Abbey insisted one mortgage was closed to make way for the current one - which meant £99 exit fees.

I guess your claim is the figure which was on your original contract you signed ,against the final discharge fee amount charged at closure.
I don't think the FSA have said it should have been £35,but I am aware we are being advised that £35-£50 should be sufficient.

Former_MSE_Dan

Hi Folks,

We have had lots of comments about what is and isn't included as a MEAF. The article has been updated to include the following text:

What a MEAF isn't.... don't get it confused

This is a strict ruling and only applies to exit fees. Application fees and others that are paid when originally getting the mortgage aren't included.

Also while MEAFs sound similar to ‘early repayment fees', commonly known as 'redemption penalties' again they're not the same thing. Early repayment fees are charged if you repay or switch mortgage during a special deal, such as a fixed or discount rate (see the Mortgage Guide / Remortgage Guide for details) whereas exit fees apply at all times.

For full details, see the Mortgage Fees Reclaiming article.

[Deleted User]

In that case I'll give it a go - none of my
Abbey paperwork gives any exit fees at all for my first mortgage with them.

I have Abbey Mortgage Conditions 2001 - with no fees actually stipulated within - just lots of legal jargon regarding terms and conditions of mortgages and reference to fees - but not how much they were.

Abbey National Mortgage Services - a straightforward guide - 2002 - which mentions various fees i.e valuation fees and HLTV - but nothing about exit fees.

Tarrif Of Charges 2002 - effective 6th Feb 02

Tarrif Of Charges 2003 - effective 6th Feb 03

Interestingly but unrelated to Exit fees - Deeds Photocopying in 2002 = £15

In 2003 it went up to £35!

MarkyMarkD

Bernard_Coleslaw wrote:

Not quite 'when the mortgage started'. Even the FSA have said that a borrower who's had a product transfer or further advance can, later on, be charged the fee that was in place at the time the product transfer or further advance took place. Not the fee that was in place when the mortgage started.

A lot of people will be disappointed if they go off to their previous lender expecting a big refund only to be told they'd signed up to the later, higher fee. This needs repeating, as the table on thisismoney does not make this point clear.

Sorry, Bernard. I have made this point clear in other posts but I suppose I ought to keep repeating it. "When the mortgage started" means when you last switched product or took a further advance, as at this stage you should have been notified of (and implicitly accepted) the higher fee.

MarkyMarkD

Deleted_User wrote:

Is £99 still OTT - if the cost of handling the paperwork is about £35 I just wondered if anyone is claiming back on these smaller amounts?

I have had 2 Abbey mortgages since Britannic money - one was a remortgage from Britannic and the other was when I moved house and Abbey insisted one mortgage was closed to make way for the current one - which meant £99 exit fees.

isayoldchap wrote:

I don't think the FSA have said it should have been £35,but I am aware we are being advised that £35-£50 should be sufficient.

Re both posts - the FSA have said that there is no connection with "actual costs" here. Lenders can charge whatever they choose to set out in your original mortgage offer (or, as posted earlier, your product switch offer or further advance offer if you have done either of these things since you took out your original mortgage). For the avoidance of doubt, if your lender issues you an illustration saying that the product has a £1,000 MEAF, then the FSA haven't said anything at all to make that unacceptable.

Effectively they are saying that it is not up to them how lenders choose to allocate fees and charges over the life of a loan, as long as it's transparent to the consumer. And that's fair enough. I've posted previously that it's actually fairer to charge customers less whilst they remain with a lender, and to charge them more when they leave, as that rewards loyalty. The lower MEAFs are, the more that rate tarts are subsidised by those who stay for the long haul.

annie42

Deleted_User - I have the Abbey 2002 tariff which states on page 20 a £95 deeds handling charge which is what they call their exit fees.

isayoldchap

MarkyMarkD wrote:

Re both posts - the FSA have said that there is no connection with "actual costs" here. Lenders can charge whatever they choose to set out in your original mortgage offer (or, as posted earlier, your product switch offer or further advance offer if you have done either of these things since you took out your original mortgage). For the avoidance of doubt, if your lender issues you an illustration saying that the product has a £1,000 MEAF, then the FSA haven't said anything at all to make that unacceptable.

Effectively they are saying that it is not up to them how lenders choose to allocate fees and charges over the life of a loan, as long as it's transparent to the consumer. And that's fair enough. I've posted previously that it's actually fairer to charge customers less whilst they remain with a lender, and to charge them more when they leave, as that rewards loyalty. The lower MEAFs are, the more that rate tarts are subsidised by those who stay for the long haul.

Thanks MarkyMarkyD
We await the 28/02 ish to see if they can agree to a lower charge.

[Deleted User]

MarkyMarkD wrote:

Re both posts - the FSA have said that there is no connection with "actual costs" here. Lenders can charge whatever they choose to set out in your original mortgage offer (or, as posted earlier, your product switch offer or further advance offer if you have done either of these things since you took out your original mortgage). For the avoidance of doubt, if your lender issues you an illustration saying that the product has a £1,000 MEAF, then the FSA haven't said anything at all to make that unacceptable.

Effectively they are saying that it is not up to them how lenders choose to allocate fees and charges over the life of a loan, as long as it's transparent to the consumer. And that's fair enough. I've posted previously that it's actually fairer to charge customers less whilst they remain with a lender, and to charge them more when they leave, as that rewards loyalty. The lower MEAFs are, the more that rate tarts are subsidised by those who stay for the long haul.

As I went from one Abbey mortgage straight into another through moving house it would have been nice if Abbey could have waved the exit fee on the first one altogether - as show of appreciation for my loyalty in sticking with them - or perhaps found a way of just swapping the old mortgage onto the new house - but I suppose that really IS asking for too much.

4$£&*(£$&*(!

I've looked around my paperwork and can't find anything that the Halifax told me related to a MEAF, so I've filed in a letter today asking for the lot back - £150 exit fee plus £50 deeds transfer fee.

Bernard_Coleslaw

MarkyMarkD wrote:

Sorry, Bernard. I have made this point clear in other posts but I suppose I ought to keep repeating it. "When the mortgage started" means when you last switched product or took a further advance, as at this stage you should have been notified of (and implicitly accepted) the higher fee.

No worries. :rolleyes:

My concern is that there are loads of people (including the financial press) going on about the 'originally quoted fee', so it's important to make this distinction.

I think that since the FSA have allowed lenders to charge a higher one in certain instances, you can be certain they'll take advantage of it!