If you have Re Mortgaged in the last 5 years

[Uncle Spielberg]

The Financial Services Authority who regulate mortgages have made an important ruling

If you have re mortgaged in the last 5 years or so you can claim the increase in the " exit fee " the lenders have charged. What you would need to do is check the offer letter from the original lender and then check the actual exit fee they charged you when the re mortgage to the new lender went through.

Typically 4 or 5 years ago, the exit fees were £ 75 - £ 100 and now they are £ 200 - £ 295. Basically if the original exit fee was quoted at £ 100 and you were actually charged £ 250, you could be entitled to a cheque for £ 150 from the old lender by writing to them and asking for this back. If you have re mortgaged a couple of times in the last 5 years this could be 2 lots of £ 150 or so.

Do not confuse this with " early redemption penalties ".

This could affect 10 000 000 people Nationwide.

Good on the FSA.

If you need any help or advice PM me.

 

[tinx]

Hmmm I'll have to check this out, In the last 5 years I have remortgaged twice.

 

[Uncle Spielberg]

Tinx

You could well be entitled to 2 refunds , could be a couple of hundred quid for writing a couple of letters.

 

[Uncle Spielberg]

Big to the FSA, the lenders have been increasing this exit fees for a while hoping noone notices and theres no justification for it, Aliiance & Leicester Plc are the worst now charging £ 295, now the FSA need to look into the ever increasing arrangement fees lenders are charging particularly for fixed rates.

 

[Moshe Gariani]

1. Do you know if C&G will be paying out?

2. If we remortgaged with the same lender would we of paid an "exit fee"?

ps
everyone who gets their money back should put a tenner into a pot for you to place on your next surefire racing selection...

 

[Uncle Spielberg]

if you stayed with the same lender and negotiated a new deal there would be no exit fee, its only if you left one lender and went to another. I will be contacted all my clients over the next week as it could average £ 100 - £ 150 for writing a letter and it should be in your bank account and not the lenders.

 

[Uncle Spielberg]

FSA moves on mortgage exit fees

Mortgage exit fees are supposed to cover the cost of paperwork
Lenders that raise mortgage exit fees may have to "justify" their actions to the Financial Services Authority (FSA).
Exit fees are usually between £150 and £300, and are levied when a borrower pays off their mortgage.

The FSA wants lenders to either charge nothing, stick to the original fee or show good reason why it needs to rise.

*****People who have already paid an exit fee may be able to get a refund if they paid more than was originally set out and the increase cannot be justified.*****

Fees soared

We expect these measures...will stop borrowers from being surprised by unexpected increases in these fees

Clive Briault, FSA

The level of mortgage exit fees has soared in recent times.

Last year, the BBC News website found that some had more than doubled in the past five years.

This has led consumer groups and some independent financial advisers to cry foul.

These groups have claimed that lenders have been profiteering from the fees.

In response, lenders have said the fees are to cover the cost of administration.

The FSA has been looking at the issue of exit fees since 2005.

It did not comment on how the exit fees had risen in previous years, instead preferring to outline how it expected lenders to behave in the future.

The watchdog said that from 28 February, lenders will have to:

Charge no fee
Stick to the original exit fee
Increase their fees but only if justified.
"We expect these measures...will stop borrowers from being surprised by unexpected increases in these fees," Clive Briault, FSA managing director, said.

"People will now know when they sign-up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be increased fairly," he added.

The Council of Mortgage Lenders (CML) said it "welcomed" the FSA's statement.

 

[Uncle Spielberg]

1. Find original mortgage offer letter of lender you re mortgaged away from.
2. Check on this offer letter, the exit fee quoted ( this is not the early redemption penalty ).
3. Check redemption statement you were actually given when the re mortgage to the new lender went through ( this is normally sent to the solicitors used but you should have been given a copy ).
4. Check the actual exit fee charged on the redemption statement.
5. If 4 is more than 2 write to the old lender and claim a refund of the difference quoting the FSA ruling and demand the balance back, don't give them an option
6. With your letter send a copy of the original offer letter highlighting the exit fee quoted and send a copy of the redemption statement highlighting the actual exit fee charged.
7. Keep copy of all corresponence and give them 2 weeks before writing again or calling

 

[Arrid]

What about application fees.
3 / 4 times more than exit fees, a bloody rip off.

 

[Uncle Spielberg]

correct, I mentioned that above, FSA needs to look into that as well

 

[The Clown of Pevensey Bay]

Will Northern Rock be affected?

What is the difference between an "exit fee" and an early redemption penalty?

 

[hans kraay fan club]

US, I suspect that most of your loyal followers who back your sure fire winners, are very likely to have needed to remortgage in the last few years!!

 

[Uncle Spielberg]

Will Northern Rock be affected?

What is the difference between an "exit fee" and an early redemption penalty?

an Exit fee is a charge the lender makes for a bit of final paperwork to close the mortgage account. It used to be about
£ 75 which is fair but for no reason has gone up to £ 250 in the last few years even though the cost of doing this would not have risenat all.

an early redemption penalty is something the lender charges if for example you have a fixed rate for 2 years but pay the mortgage off within the 2 years. this chargey finishes when the rate finishes.

 

[Uncle Spielberg]

Bounced