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Home insurance & mortgage
Jacko07
Posts: 1 Newbie
In February 2006, my partner & I took out a mortgage with Alliance & Leicester to buy our first home. Whilst going through the offer, the advisor asked if we wanted to take out home insurance with them. We declined as I already knew we could get it cheaper elsewhere. As we took it out with another company, Alliance & Leicester charged us a £25 fee which was added to the mortgage. This always bugged me as I felt we were been penalised for being financially savvy. For the past 11 years we have been paying interest on the £25.
How can this be right? I appreciate they call it an administration fee for checking we have the house insured, but they've never checked with us (it has always being insured).
Can I take this up with anyone?
How can this be right? I appreciate they call it an administration fee for checking we have the house insured, but they've never checked with us (it has always being insured).
Can I take this up with anyone?
0
Comments
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You could have just paid them the £25 rather than borrowing it. If the interest on £25 is really bothering you that much...0
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It was also part of taking a mortgage out with them, you had the choice of going with a different lender at the time.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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Many lenders did this at the time to try and discourage borrowers from taking insurance with other companies.
We shopped around and the new insurance company paid the £25 for us ( discount off the quote )
Most if not all lenders have now dropped this charge however each year a number of borrowers end up with HUGE debts following house fires/floods and failing to take out home insurance. For whatever reason !!!!
The lender then ends up with a borrower with a mortgage ( debt) but no assets0
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