NEW Mortgage Exit Fees Discussion

tingly

mark,

I can understand you not believing it, i felt ill when i received it,
but let me explain further----

when i was changing my mortgage, i rang refuge and asked them if there were any redemption penalties. I received a letter stating that there were no redemption penalties, but i would have to pay a deeds release fee, and administration costs "as applicable"

The original mortgage was on a property valued at that time of £350,000, AND it was not on a deferred interest method-- i still have the paperwork.
It was a straightforward, variable mortgage, i didnt have to pay an arrangement fee, there were no redemption penalties, no fixed period ,nothing!!

BUT Refuge stated that because of the clause which i printed earlier, they were entitled to what they thought was fit for an admin fee and led me to believe that however high, admin fees were uncapped.

I know, its a shocker.
I'm glad i kept all the paperwork. I am going to ring them tomorrow.
I suppose my real question is, can an admin fee and deeds release fee be unspecified and uncapped?

MarkyMarkD

Thanks for the response.

It's far too long ago for the FSA's ruling to be relevant, and it's far too long ago for you to take legal action.

So whatever the rights and wrongs, Refuge are entitled to tell you to "get lost".

I don't understand how they could substantiate a £1,675 admininstration fee, if that's what it was, on the basis of a wording which says that they will pass on their costs, not charge a profit-making amount.

The answer to your "real question" is that, in respect of a mortgage ended over 6 years ago, they can charge you what they like and you can't (now) do anything about it.

If it was within the last 6 years, then the answer to both questions would be no - an unspecified fee would be capped at the amount charged to customers redeeming at the time you took out the mortgage, and no fee is therefore able to be uncapped.

tingly

Thanks Mark for the answer, i wasnt sure whether there was a time limit on it.

I actually knew I was being unfairly treated at the time, rang up, wrote, played hell etc, but to no avail.

still at least you have saved me wasting any more time, i'll just have to chalk it up to experience-- my interest was renewed on seeing this board thats what started the whole thing off again.

thanks again for your response

regards

tingly

sandwayne

I am currently changing lenders.
I have had a discharge (exit) fee from Northern Rock current lender of £225.
I have discused this charge with them, they stated it was in my initial contract from 2004.
Im I entitled to any of that money back.
Their current charge for exiting is zero.

Thank You
Wayne Sanderson

Rafter

Wayne,

If they are not charging you more than your initial contract then the charge is valid.

Although they do not charge an exit fee now, they have simply increased their up front charges so newer customers are no better off.

When comparing mortgages, you should always ask your advisor to compare the total cost over the scheme including any exit charges, or do the sums yourselves.

Unfortunately many lenders subsidise a low rate or initial payment that gives them a good position on a best buy table, but the real costs when you add up front charges and exit fees is much higher.

Personally I think the FSA should insist that APRs on mortgages are calculated over the scheme length including all fees and exit costs rather than the full 25 years - then companies won't be able to hide their charges and quote an artificially low rate.

R.

sandwayne

Rafter,
Many thanks to your reply.
I know what to check when takingh out another one

Wayne

LostSocks

MarkyMarkD thanks for your reply.

Although I'm a little bit confused. As far as we were aware, when we took out the additional lending, it is a separate loan which runs concurrently to our original loan. We signed a separate loan application and had different terms, interest rate was higher, £0 exit fee and a 4% redemption fee if we redeemed it early. So in our mind, we owe a redemption fee, but no exit fee for the additional loan, and an exit fee as stated on our original mortgage contract of £95, not the £195 we paid.

cm233lh

I just got my redemption statement from C&G. I was expecting the current £250 or whatever, but they've included only £150 which is £50 per sub-account, which is what I was expecting (though not over the moon about).

Just reading Paul's logic above - is £150 proportionate to the costs involved when they would only charge £50 if I only had 1 sub-account? Should I try to negotiate it down before the completion date, or is it best to wait till after it's all gone through and then call up and cry "foul"?

danm

I am shortly due to remortagw with A&L.

They want to charge me a £250 'mortgage review' fee.

In light of the ruling re: fees being proportionate to the work involved etc, hs anyone had any sucess in claiming such fees back.

bear in mind that they have not provided me any advise etc. just sent through a list of products available to existing customers on remotgages.

MarkyMarkD

LostSocks wrote: »

MarkyMarkD thanks for your reply.

Although I'm a little bit confused. As far as we were aware, when we took out the additional lending, it is a separate loan which runs concurrently to our original loan. We signed a separate loan application and had different terms, interest rate was higher, £0 exit fee and a 4% redemption fee if we redeemed it early. So in our mind, we owe a redemption fee, but no exit fee for the additional loan, and an exit fee as stated on our original mortgage contract of £95, not the £195 we paid.

The FSA ruling explicitly says that the fee you are due to pay may change as a result of you switching product or taking a further advance. Hence at the point of your further advance you are deemed to have accepted the MEAF applicable at the time, which was presumably £195.

Whilst the separate further loan agreement may have stated a £0 exit fee - meaning that there was no separate exit fee for the further advance, which is in fact just an additional amount on the original loan - there would probably have been other standard fees (including the MEAF) quoted at the same time, maybe in a "fees and charges" leaflet.

I'm speculating but I think that will be the basis of their change to £195 and the FSA ruling allows that interpretation.