If you have switched mortgages or repaid your mortgage in full in the last few years, it is possible the lender may have overcharged you for the Mortgage Exit Administration Fee.
The Financial Services Authority (FSA) have become concerned that some lenders appear to be significantly increasing the amount of fees charged when customers decide to repay their mortgage and, whilst mortgage lenders are free to vary the amount they charge, the Unfair Terms in Consumer Contracts Regulations 1999 require the firm to act fairly.
As a result, lenders had to decide by 28 February 2007 which of the following outcomes to adopt for their existing customers:
- charge no fee;
- charge the original fee;
- charge a revised fee which is equal to or lower than the original fee;
- charge a revised fee which is higher than the original fee; or
- charge the current increased fee.
Over 95% of the industry, including all the major high–street lenders, chose one of the first three options, meaning their existing customers will not be charged any more than the original fee. However, where lenders have adopted for one of the last two options, their customers will have to pay more than the original fee and the regulator has asked them to justify their position.
If you think you have been charged a higher exit fee than that stated in your mortgage contract, contact the lender to find out if you are eligible for a refund. Don’t worry if you can’t find the original mortgage documentation. If you give your name and the address of the property, the lender should be able to find your details. And, to help you, there is a template letter which can be downloaded to use for this purpose.
