This is a guide to the various mortgage charges and fees. It tells you which are lawful, which are unlawful, and how to reclaim them.
All mortgage charges are unfair in the sense that the myriad fees and interest rates are there to confuse you. But some of them are more unfair than others. By this I mean that some of these charges are unlawful, and you should get them back!
This guide will help you to do that. I'm writing it in stages, just as we did in our very successful series: The Ultimate Guide To Reclaiming Bank And Card Charges. Each article will give you more information, and will lead you through the process of reclaiming fees.
To begin with, this guide will cover reclaiming mortgage exit fees. Then I'll move on to consider whether you can claim other sorts of fees and, if reclaiming is possible, I'll give you guidance on how to go about it. By the time I'm finished, the word 'complete' in the title will be justified!
Clarifying what exit fees are: don't be confused!
Mortgage exit fees, or 'mortgage exit administration fees' (MEAFs), are fees that your lender charges when you close a mortgage to cover the administrative costs of doing so. The administration involves simple things such as cancelling your direct debit payments and transferring the paperwork to your new lender.
Your lender may call this charge something else, just to confuse you, but it's easy to know which fee this is, because it's the one your charged when you pay off your mortgage that is usually in the region of £200 to £300.
Do not confuse exit fees with 'early redemption charges', which you are charged if you leave your mortgage early, typically before your introductory deal expires.
These charges are based on a percentage of your mortgage, e.g. you might be charged 1% to 5% to get out in the first few years. This means that, if your mortgage is £100,000 at that time, the fee could be £1,000 to £5,000. This is a different sort of charge that we're still investigating to see what your chances are of claiming it back.
To get you started, here's how to claim your mortgage exit fees:
The Fool's Guide To Reclaiming Mortgage Fees, 7 February 2007
This article gives you the legal background to claiming mortgage exit fees and outlines your options.
How To Begin Your Claim For Mortgage Exit Fees, 13 February 2007
Here you can read the first two steps to reclaiming exit fees. Several Fools have already got them back using just the first step! This article includes a template letter.
Get Tough On Mortgage Exit Fees, 16 February 2007
If your mortgage company is resisting, you move to step three in your claim for exit fees. This article includes a second template letter. Read also about an alternative to consider: the Financial Ombudsman Service.
Mortgage Exit Fees In The County Courts, 20 February 2007
If your lender is not bending, take court action. Here's how I'd go about it.
Are Mortgage Redemption Charges Unlawful? 4 May 2007
I urge caution if you're considering reclaiming your early redemption charges.
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