MIAS, the Mortgage and Insurance Advisory Services (somekeyword ), can be involved that, inspite of the recent publicity and various campaigns inside the press, borrowers are still being stung by punitive exit fees.
Lenders charge exit fees when customers redeem their mortgage completely, for instance, by switching their mortgage to some rival lender. Exit fees can even be termed administration charges, sealing fees or deeds-release fees and therefore are raised to cover the price of taking property deeds beyond storage, sending these phones a solicitor and to become a final account statement. Borrowers are warned after they subscribe that when they switch lenders, theyll need to pay a fee but the dimensions of that fee is just not bound to stay.
Within the past several years, lenders have risen their exit penalties steeply, with some now topping the 300 mark (somekeyword ). Firms have claimed these hikes are essential for their increased costs and additional work, yet this justification appears hollow when one considers that property deeds are now held electronically on the Land Registry.
Alistair Good, Managing Director of MIAS said: One client, whose penalty had increased from 85 to 195 compared it with entering a motor vehicle park the place that the prices were clearly displayed, only to discover that they had more than doubled when it was time to pay.
He added: In the end appreciate that lenders must recoup the price incurred whenever a mortgage is redeemed, borrowers must be informed about these costs in the beginning. In the event the fee is excessive, then this client look elsewhere.
Although exit fees constitute a little area of overall mortgage costs, it can be unfair hitting an individual with the unexpected charge, that may reach 300. MIAS would want to see lenders state their exit fees clearly and fix them at the start of deals. Like this, the client is treated fairly, in keeping with FSA guidelines.
One of these is Northern Rock. Even though they charge the relatively high fee of 250, they actually do invest in charge the fee stated when the client subscribes for that mortgage. MIAS wish to see more lenders adopt this method. Commenting, Roger Milbourn, Director of MIAS, said: Exit fees, though unpopular with customers, are not going away soon. However, if lenders are to lose the tag of back door charging and reduce the flow of complaints to the Financial Ombudsman Service, they must be more transparent about these fees.
We percieve no good reason the exit fee is not fixed to the life of home financing, so that the client could be aware of the charge from the start. Beneath the current system, exit fees can increase by a lot more than 350% when the client comes to redeem their mortgage. This makes a mockery of the FSAs requirement to deal with customers fairly despite their claims that they are not just a pricing regulator.
In the absence of fixed exit fees, it's imperative for banks to pass through closing charges carefully with all the client. The adviser should explain that this borrower may get in a punitive charge if they switch lenders or pay back their mortgage early (somekeyword ) plus by doing this, broker and client can compare products fairly.
For additional information, please contact:
MIAS Ltd 0845 833 0878 Managing Director: Alistair Good
Director: Roger Milbourn
Notes to Editor:
The Mortgage and Insurance Advisory Service (MIAS Ltd) is often a firm of impartial mortgage advisers, offering an all-inclusive plan to clients seeking residential and commercial mortgages and mortgage protection.
Founded in 2002, MIAS has quickly gained a history of providing straightforward, impartial mortgage advice, matching clients track of probably the most competitive deals around. MIASs experienced brokers have expertise in most sectors in the mortgage market and appear following the whole transaction from start to finish, making the process as smooth and as headache-free as you can.
For even more information about the services MIAS offers, go to somekeyword
