NEW Mortgage Exit Fees Discussion

MarkyMarkD

dainowel wrote: »

Is it only me but I feel that the mortgage industry has been deregulated for years and the proof of this is that lenders have been able to introduce fees that in almost any other business environment would have been vigorously resisted.
In this country at any rate banks and lenders always have the upper hand and charge what they please.

I have been charged tens of thousands by lenders for the privilege of terminating a mortgage agreement and the fact is there is no escaping the practice all lenders now include early rtedemption clauses that are punitive to say the least.

There are all sorts of reasons why mortgages are terminated early: divorce, separation, death or sheer economics to name but a few.

I havent asked the OFT for an opinion but I wonder if anyone out there has taken the trouble to find out what the law is on this?

Your comments are invalid, IMHO. Most mainstream lenders offer products without any ERCs at all. But the quid pro quo is that the rates on these products is necessarily higher to cover the risk to the lender of early settlement.

There's no cost-effective way for lenders to offer fixed rate mortgages without ERCs, because if rates fall everyone would redeem and the lender would be left holding a huge loss.

There are, indeed, many reasons why ERCs are incurred, although lenders tend to waive them in the event of death. Why should lenders take on all of those risks, rather than them lying with the borrower? As I've said above, the borrower could choose to pass the risk to the lender, by taking out a more expensive rate mortgage without any ERCs.

Gareth56

I've just redeemed my mortgage with Kensington :j

When I signed up back in 2004 the advertised 'Redemption Administration Fee' was £125.00. I paid [2008] £145.00. Could this be classed as a justified increase or do I have reasonable grounds to claim the £20 excess?

Also the 'Deeds Release Fee' in 2004 was £35 now it's £45. So again when I ask for the deeds back should I point out that the fee at time of arrangement was £35? Out of interest why do the mortgage companies hold onto the deeds even when you've redeemed the mortgage? Shouldn't they just send you them back?

Thanks
G56

MarkyMarkD

I am sure that Kensington will claim that the increase is justifiable with regard to the whole £30 increase.

And the reason they don't simply send you the deeds is that you haven't paid the deeds release fee meaning that you haven't actually redeemed the full mortgage balance.

Gareth56

MarkyMarkD wrote: »

I am sure that Kensington will claim that the increase is justifiable with regard to the whole £30 increase.

And the reason they don't simply send you the deeds is that you haven't paid the deeds release fee meaning that you haven't actually redeemed the full mortgage balance.

So despite requesting a redemption figure (to fully pay off the mortgage) and paying that redemption figure the mortgage still isn't fully redeemed because I have to pay £45 to get the deeds sent to me?

I thought that if you requested a redemption figure from a mortgage company then the figure they sent you was the amount to fully redeem the mortgage?

Noz

That's to redeem your mortgage, you can do that without receiving any deeds

Gareth56

Noz wrote: »

That's to redeem your mortgage, you can do that without receiving any deeds

Sorry to appear thick here but I don't quite follow. I've payed off my mortgage in full, ergo I don't owe the mortgage company anything any more, so why don't they just send me the deeds to my property back to me. What difference does it make if the mortgage company holds onto them? Have they any say in what happens to the house? Actually what are "The Deeds"?

classrunner

I am about to redeem my mortgage and have been advised that I will be charged £73.50 (original charge 10 years ago when taken out) but will also have to pay £100.00 solicitors bill unless I employ my own solicitor. Does anyone know what the solicitor does and if it is worth me looking to using private solicitor rather than the societys. I am a bit confused and had not budgeted for the extra £100.00.

Gareth56

classrunner wrote: »

I am about to redeem my mortgage and have been advised that I will be charged £73.50 (original charge 10 years ago when taken out) but will also have to pay £100.00 solicitors bill unless I employ my own solicitor. Does anyone know what the solicitor does and if it is worth me looking to using private solicitor rather than the societys. I am a bit confused and had not budgeted for the extra £100.00.

I didn't use a solicitor, (and am not aware that it's a legal requirement to do so), to redeem my mortgage. All I did was request a redemption figure from my mortgage company for a particular date, then on that date popped down to my bank and did a CHAPS transfer to complete the process. So I can't really see why your mortgage company is insisting on using a solicitor other than to screw more money out of you (which wouldn't surprise me when it comes to banks!)

Noz

Classrunner, are you located in Scotland?

MarkyMarkD

"Deeds" don't mean anything any more.

But it is necessary for the lender to remove their charge, recorded against your property at the Land Registry, or you won't be able to sell the property or use it as security against any future loan.

Presumably as well as not releasing the deeds, they also won't remove their charge unless you pay the fee.