Thread: Mortgage exit fee overcharging
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8th Mar 2007, 3:34 PM #1
Mortgage exit fee overcharging
As part of my occupation I remortgage my client's for better deals from the whole UK lender marketplace. I noticed within the last couple of years that lenders have been significantly upping their exit charges. When you take out a new mortgage you get a "Key Features" document which indicates all the charges and expenses in relation to that mortgage however many lenders are charging my clients more than was stated on this document at outset which to date legally they could do.
One lender had increased the fee in 2 years from 99.00 stated on the document to 249.00 . Because I have to ensure the details on this key features document are completely accurate at outset I was surprised at the banks being able to change it so readily with significantly more than inflationary rises. I think on the basis of "treating customers fairly" they should have stated the actual charge they would apply on exit upfront. It makes it more difficult to do my job when they move the goalposts like this.
Anyway the regulator, The Financial Services Authority has finally caught up with this irregularity.
If you have remortgaged at least in the last 3 years and haven't done so already my advice to you is to make a claim - I understand each claim may be worth around 100. It's not guaranteed but it's worth the time and trouble of firing out a letter.
This website I understand has some guidance and template letters to assist. Please note that I don't endorse it in any other way.From website www.moneysavingexpert.com (You could also check out the FSA website)
the article:
"Have you switched mortgage or paid it in full in the last few years? If so, it's likely you were overcharged by your old lender, possibly by 100s, and now officially can get this money back. This step-by-step guide will show you how to reclaim your cash in minutes.
It's all about mortgage exit fees', which you pay when closing a mortgage account (including shifting to a new lender). Sneakily some lenders have been charging people more than their contracts stated and, thankfully, in January '07, the regulator, the FSA announced if "past customers have paid a higher fee they can expect a refund of the difference".
I hope those of you who have been unfairly charged on exit from your old lender have some success with this.
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8th Mar 2007, 3:37 PM #2
Interesting. It doesn't apply to me, but thanks for the heads-up, Ralph.
Si.
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8th Mar 2007, 6:30 PM #3Captain Tancredi Guest
From dealing with completion statements on a day-to-day basis, it also depends on people being aware of just how much they were charged- if somebody was remortgaging, the likelihood is that the exit fee would just be included in the amount of the new mortgage lend, bearing in mind that the final figure is only worked out to the day of completion.
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9th Mar 2007, 4:52 PM #4
It's about time banks and lenders were challenged for being so unfair, and it's good that this appears to be the case, not only over unlawful bank charges, but in this instance, too. It doesn't affect me, I have to say, but I gather that having a mortgage is hard enough without having to worry over excessive fees should you wish to change your mortgage.
I must say, though, (and I have no reason to endorse it, either, although it's highly receommended) that the MoneySavingExpert website which Ralph mentioned has been an absolute godsend to me lately (Martin Lewis is my new guru! ), and as well as advice on bank charges, it gives you tips on how to save money in other ways, from buying online, to buying train tickets. It's worth a look.
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