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Mortgage Redemption Fee
pyrogena
Posts: 1 Newbie
Hi,
I'm not sure if this is in the right place, but I wonder if anyone has any experience of my mother's current situation.
About 8 years ago she took out a lifetime mortgage from Natwest to consolidate debt. At the time it seemed like the right product and she was planning on paying it off like a standard mortgage. The option however was there to not repay anything and just let it tick over.
Her circumstances changed and she decided she wanted to take some money "out of the bricks" and therefore extend her existing mortgage. The house has risen enough in value for this to happen.
She contacted Natwest to be told that they no longer offered the lifetime mortgage product and she was also too old (she's 67) to take out a standard mortgage with them. Her only option was to go to another provider. When she was originally sold the mortgage with Natwest she was told that she could extend it in the future if needed.
She chose to go to Aviva, and secured an equity release mortgage (at a lower percentage than Natwest current mortgage). She secured enough to pay off Natwest and take out the money she wanted.
Her solicitor advised her that she had dealt with a number of these cases before and that as Natwest nolonger offered the product, she would request that the redemption fee (£2500) be waived - as mum effectively had no choice but to leave early from Natwest. Verbally on the phone to the solicitor Natwest agreed to this and then sent through a redemption statement with the figure owed reflecting this (i.e. no early redemption fee).
Now, some 4 weeks post completion Natwest have contacted her solicitor saying they made an error and the fee does in fact stand and they won't release the charge on the house until it's paid. Everything else has gone through, Aviva have issued funds to mum (and Natwest).
Sorry for the long post - but in essence, can Natwest do this? Mum is fighting it. Immediately she has requested that they suspend interest on the figure until it is sorted, but feels very strongly about her position. I was wondering if anyone had any advice or past experience of this sort of situation.
I'm not sure if this is in the right place, but I wonder if anyone has any experience of my mother's current situation.
About 8 years ago she took out a lifetime mortgage from Natwest to consolidate debt. At the time it seemed like the right product and she was planning on paying it off like a standard mortgage. The option however was there to not repay anything and just let it tick over.
Her circumstances changed and she decided she wanted to take some money "out of the bricks" and therefore extend her existing mortgage. The house has risen enough in value for this to happen.
She contacted Natwest to be told that they no longer offered the lifetime mortgage product and she was also too old (she's 67) to take out a standard mortgage with them. Her only option was to go to another provider. When she was originally sold the mortgage with Natwest she was told that she could extend it in the future if needed.
She chose to go to Aviva, and secured an equity release mortgage (at a lower percentage than Natwest current mortgage). She secured enough to pay off Natwest and take out the money she wanted.
Her solicitor advised her that she had dealt with a number of these cases before and that as Natwest nolonger offered the product, she would request that the redemption fee (£2500) be waived - as mum effectively had no choice but to leave early from Natwest. Verbally on the phone to the solicitor Natwest agreed to this and then sent through a redemption statement with the figure owed reflecting this (i.e. no early redemption fee).
Now, some 4 weeks post completion Natwest have contacted her solicitor saying they made an error and the fee does in fact stand and they won't release the charge on the house until it's paid. Everything else has gone through, Aviva have issued funds to mum (and Natwest).
Sorry for the long post - but in essence, can Natwest do this? Mum is fighting it. Immediately she has requested that they suspend interest on the figure until it is sorted, but feels very strongly about her position. I was wondering if anyone had any advice or past experience of this sort of situation.
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