NEW Mortgage Exit Fees Discussion

donglefan

_Andy_ wrote: »

John if £200 is what you agreed to, i.e. in your mortgage offer letter, then there is nothing to claim back.

I'm not sure that is true.
Martin's article draws a parallel in law with illegal bank charges:

It's arguable that MEAF fees aren't justified, much like with reclaiming bank charges and reclaiming credit card charges the basic concept is that under UK contract law, you can't fine someone for breaking a contract, you can only charge them an amount proportionate to the cost of the breach.
The actual administration cost to a mortgage lender of closing down a mortgage isn't thought to be much more than £50 so it's arguable that you needn't pay more than £50, regardless of what your contract says. Therefore writing to your lender, asking it to justify the charges with a full breakdown, and if it refuses asking for a full refund, can work.

Maybe the answer is to pay them the sum owed on the mortgage and not the closing fee (or say £50 for it) and let them chase you for any more if they want to?

dunstonh

I'm not sure that is true.
Martin's article draws a parallel in law with illegal bank charges:

Martin's article is an opinion. It is not fact. It is not consistent with the FSA ruling which is what Andy was referring to.

MEAF's are not a penalty charge. It is an administration charge. It is costed in advance and shown as part of the overall contract agreement. Bank overdraft and credit card charges are penalty charges and with those the cost is meant to be proportionate. Admin charges do not have to be proportionate. An element of profit is allowed to be factored into them. You would have to prove to a judge that a charge that was set out in your contract prior to you even having the mortgage and fully known about is a penalty charge. No-one has knowingly done that.

donglefan

Thank you, that makes sense.

Do you know what is the minimum sum them allow you keep owing, to keep the account open and avoid the fee? (In my case it's C&G charging the contractual £225 which if say £1 were left on the balance, they would never recover in interest.)

Door_knockers_will_die

I have a 20 year endowment mortgage with the Halifax which is due for repayment in September. I have all the paperwork. The original documents seem to say that there is a Mortgage discharge fee of £40 and Deeds despatch fee of £15. The latest statement still shows the £40 fee but the £15 has risen to £50, and also states that third party fees (ie solicitors, land registry) will also be payable.
Should I leave a small amount outstanding to avoid this ? Will I actually be able to do this ? The endowment is only going to pay 60 % of the promised sum anyway, although I have been gradually getting the total down so can repay ok.

MarkyMarkD

You will have to pay them the £55 at some stage, either when you would (naturally) redeem the mortgage or when you sell the house - or die!

Putting it off is really not worthwhile given the small amount involved.

If you have changed products ever, it is likely that the increase to a total of £90 is correct.

The reference to solicitors' fees applies in Scotland and is unlikely to apply in England or Wales.

kbapu

i want to ask a question about my mortgage, i used to be on a normal mortgage with halifax and then last year we changed to a fixed rate mortage, we want to change back but the bank says we have to pay nearly £3000!is there any way we can avoid this charge?

i would really appreciate any advice on this

thanks

dunstonh

is there any way we can avoid this charge?

No. The charge is valid and fair and there is no way to get out of it with a mainstream lender.

_Andy_

kbapu wrote: »

mortage, we want to change back but the bank says we have to pay nearly £3000!

I'm not sure why you seem surprised - it was on the KFI and mortgage offer so part of the conditions you agreed to.
In answer to your question, no, there isn't anything you can do to avoid it.

nugentjcr

Hi,

When I took a mortgage out in 2003 the mortgage was for £79,000 however as the mortgage was for 100% the RBS charged us £2,000 and added this to the mortgage making the mortgage £81,000.

Is this illegal? Can I get a refund?

If anyone has any thoughts or comments please let me know.

Thanks,

Joe

dunstonh

Is this illegal?

Of course its not. If it was the police would be involved.

Can I get a refund?

no.