ERCs- Early Repayment Charges - early exit fees. (merged).

dunstonh

They valued it very low when house prices here were rocketing..

In other words, they were realistic.

The loan itself was provided by igroup

igroup tended to be sub-prime and poor quality lending. A lender of last resort effectively.

Does that mean we have no come back? there was no key facts though they have sent me out a copy of the agreement.

prooving no KFI was issued is going to be near impossible. If no adviser was involved then they would have posted it to you. The offer letter is the primary document here. It would have the terms. Offer letters used to signed in front of a solicitor and the solicitor would point out the terms of the contract and the tie ins. Over the years, people have stopped using solicitors for that and have taken on the responsibility for reading and understanding it themselves. If its on the offer letter, then they are covered. You always get less consumer protection when you dont use an adviser. So, you dont have that option available to you either.

There is nothing on the page you sign at all.

Doesnt need to be. As long as its on the contract, which may spread over a few pages.

there is no mention about early repayment until you turn over the page and read the very small print.

The important thing is that it is there.

Also, they kept sending me information about changes to the terms and conditions, ie erc equal to one month interest with 30 days notice. it's on lots of their correspondance. Does it count for me and not for them?

If you have evidence that they told you something different to reality then it works in your favour and gives you a strong chance of success. Are you sure the charges are covering the same thing?

loveleelaidee

Yes, the charges are early redemption charge, all their correspondaence states this in purple and white, they charged me 6 months interest not one, then when I spoke to them on the phone they told me it was one month notice for one month interest payable, fair enough I thought. Though then I requested the money, six months interest, be returned having paid it, STUPIDLY, perhaps.I have a copy of the loan offer which has no mention of the erc at 6 months and the signed agreement which has the details on the back. What can I do now.
Also if you can help , do I have any comeback re the Land Registry being incorrect and not removed by GE despite requesting it be removed on around 8 or 9 occasions. Since October

blondehead

I HAVE JUST RECENTLY JOINED IN THE RECLAIMING PROCESS.I WROTE TO TWO COMPANIES ABOUT PPI ONE HAS REPLIED SAID THEY ARE DEALING WITH IT THE OTHER IAM STILL WAITING ON, BUT IT WAS ONLY A WEEK AGO.I ALSO WROTE A LETTER TO MY OLD MORTAGE COMPANY ASKING THEM TO LOOK AT MY EXIT FEES AS I HAD NO DETAILS (PAID OFF MORTAGE THREE YEARS AGO) I DIDNT HOLD MUCH HOPE ON GETTING ANYTHING BUT TODAY I RECEIVED A CHEQUE FOR £235 THANKS TO MARTIN!!!!!!!!!!!:j

MarkyMarkD

Thanks, dunstonh, for your helpful comments.

I hope that others reading this thread will accept that, if their mortgage lender will not advance further funds on their property, the right thing to do is to NOT BORROW MORE MONEY, rather than going to a loan shark which is effectively what lovelee has done.

Whether or not the offer document included the ERC, the fact remains that the agreement which lovelee DID sign, DID include the ERC.

I think that, as dunstonh says, there are two sorts of ERC applicable here. With loan shark type lenders there is often a requirement to give notice of redemption (which has one ERC) but then there's a more normal ERC (typically six months' interest) which applies for many years.

You don't get "owt for nowt". Dodgier lenders rely on ERCs because they charge interest rates which are over-the-odds, and they would suffer hugely from early redemption if ERCs were not there to ensure they cover their costs. And before someone says "but their costs are too high", they are high because their losses are very high, because they lend to people who really shouldn't be borrowing.

jrs101

Hi,

I'm thinking of ditching my fixed rate (5.79%) deal which expries 31 Aug 2009 to try and take advantage of the Bank of Englands' recent reduction in the base rate.

I am trying to avoid paying the ERC charge (3%) which equates to about £5000. Firstly, whats the chance that this may be waived? I have written a letter to my lender, no repsonse as yet.

Secondly, if I have to pay the ERC how to do I work out if its worth trying for another deal?

Thanks very much for any help...

MarkyMarkD

There is no chance at all that your lender will waive the ERC. Why on earth should they?

You will just have to wait 7 months - not very long, in the scheme of things - and then remortgage, assuming that your mortgage doesn't in any case revert to an attractive variable rate at the maturity of your fixed rate deal.

It definitely will NOT be worth paying the ERC to get out at this stage, unless your lender is one of the unusual ones where the ERC falls each month during the fixed rate term. With most lenders, the ERC is a flat 3% (or something similar) and you are only going to save at best 2% on your rate, which is just over 1% over 7 months. Not worth switching.

But first, look at what the deal is at the end of the 7 months. If that's attractive, you'd be daft to bin it for the sake of a few quid's savings over the next 7 months.

_Andy_

jrs101 wrote: »

Hi,
I am trying to avoid paying the ERC charge (3%) which equates to about £5000. Firstly, whats the chance that this may be waived?

None whatsoever.

Cantona7

exit penalty 37k !!!!!!! with Northern Rock , can anyone help ?, will they negotiate ? , trying to buy another house they wont port over current mortgage ( taken out 3-4 yrs ago ) as they have re assessed as of todays criteria , all want is to move same mortgage over to a larger property , they wont allow it so stuck , cant move , would happily pay all mortgage off if they just want off their books but cant justify paying 37k redemption penalty, help anyone ?

MarkyMarkD

No. Can't help.

You are committed to paying the ERC.

I post quite frequently that mortgage portability is a limited benefit and only applies if the lender feels like lending you the money.

dunstonh

exit penalty 37k !!!!!!! with Northern Rock

Is that the actual early repayment charge or does it include other things like repayment of loans on excess of property value? If it is the ERC then you have a nice sized mortgage. Around £740k to £1 mill