How To claim a refund for your Mortgage Exit Fees.
Mortgage exit fees are the amount of money your bank or building society charge if you remortgage and leave them for a different lender.
Mortgage exit fees should not be confused with early redemption penalties. These fees are charged if you leave your mortgage earlier than the stated time period in your mortgage contract. These are an additional fee to an exit fee.
In recent years the average cost of mortgage exit fees has increased from around £50 to between £200 to £300. Many mortgage lenders argued that their small print justified raising their mortgage fees. Although legally this is correct the FSA ruled that the increase in exit fees should have some justification rather than have been an arbitrary increase. (The real reason is that in an increasingly competitive remortgage market, increasing exit fees were usually a painless way to increase profit margins for the lenders) At the end of February most mortgage lenders such as the Halifax, Nationwide, HSBC, Alliance and Leicester and Northern Rock agreed that they couldn’t justify their mortgage exit fee increases They have said they will be willing to refund customers who have been charged exit fees in recent years. However the onus is on the customer to come forward, don’t wait for mortgage lenders to give it back voluntarily.
Who can Reclaim Mortgage exit fees
Anybody who has remortgaged in the past 2 or 3 years can claim for a refund of the difference between the exit fee on your contract and the exit fee you were charged. For example if your contract says you would be charged £60 but the bank actually charged £200 you can claim a refund on the difference between the two.
It should be quite a simple process to get the money bank. Just write a simple letter to your mortgage dealer. It may be worth ringing their general helpline to ask for best department to write to. In your letter simply state that the exit fee you paid was higher than the initial fee quoted when you first took a mortgage out. Under the recommendation of the FSA the bank is obliged to refund the difference.
If you can’t find your initial contract it is still worth writing to your bank and asking for a refund. They are likely to cooperate and tell you what the existing charge was. However if they don’t cooperate it may be difficult to force them