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Mortgage Exit Fees
Mortgage lenders have faced bad publicity recently when they increased their
mortgage exit fees by between 25% and 100%. These are fees they charge when borrowers pay off or move their mortgages. This move has been seen by many as a way lenders are trying to recoup their profit margins at a time when the mortgage market is fiercely competitive.
However, lenders have been forced to pledge that they will not charge the increased fee for existing borrowers. This came after strong pressure from the Financial Services Authority that unhappy customers should complain to the Financial Ombudsman Service if they did not receive refunds.
The actual lender's cost of administering a mortgage closure is probably no more than £50. So it upset some borrowers to be charged nearer to £200 when the actual fee stated in their original mortgage could have been half that amount. Some mortgage lenders argue that they should have the flexibility to adjust the mortgage exit fee for the period of the mortgage, which can be up to 25 years. However, most lenders have given in to public pressure and agreed to stand by the original fee amount.
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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