What have i paid an exit fee for?

rosebud_50

I've just paid off our mortgage with LLoyds, including the £225 exit fee. Today we recieved our deeds and were told we would have to see a lawyer, get a discharge letter for Lloyods to sign, which they would send back to our lawyer and then this would be sent to the land registry!
Is this right? I thought the " closing administration fee" covered all of that

jonesMUFCforever

I think it should.
However the deeds - land certificate?
should not have been sent to you if Lloyds still hold a charge over them.

I would certainly telephone them for an explaination.
The only other thing that I can think of is whether you ever let Lloyds have a second charge to secure business lending perhaps?

rosebud_50

Thanks for the reply.
This was a small flat we bought to allow my husband to work away from home 4 nights a week with an interest only mortgage. We allowed it to go to the normal variable rate after the fixed term to avoid paying the redemption fee for early repayment.
I certainly will phone them today but wanted to check if anyone else had heard of this.

homer_j_3

The closing fee is to pay for lloyds to shut down your account so effectively this means:

- Process the final payment and/or zero the account on the computer system.
- Prepare the Form ds1 for the solicitor and electroncally discharge the charge with the land registry
- Send the deeds to the client/solicitor.

You then have to get your solicitor to make sure that the charge is removed - it may be possible to do yourself but things may have changed since my time working in this area. This cost is not covered in the exit fee.

rosebud_50

Thank you Homer.
Well, I phoned them is this is what they said :apparently it is Scottish Law that if we sell the property, we need a Lawyer to draw up a discharge document, send it to Lloyds who will then send it to land registry. I then asked what did I pay the exit fee for when in the rest of the UK all of this is covered in that fee? No answer. I will chase this further!

homer_j_3

Scottish law is different to english law and more specifically the way property is registered etc. This does ring a bell from my yesteryears about getting a solicitor to draw up the documents. That said, the fee does seem excessive and I would certainly challenge it on the basis that they are charging for the same work an english property would be charged yet the processes are clearly different.

You may want to put in writing a complaint if they do not give you a suitable response and take this to the ombudsman if you are still not happy following this.

jonesMUFCforever

Sorry OP did not mention he was in Scotland in original post.