Mortgage Penalties

[Anthony Theobald]

Hi everyone!

 

My sister and her partner switched lenders for their mortgage. They initially took out a mortgage with Northern Rock. They had the mortgage for about 5 years. In 2005 they switch lenders to Natwest. Northern Rock imposed a penalty of £ 8000.00!

 

How can they do this and is it legal? If anybody knows anything about the legalities could you let me know on my email on tonytheo@msn.com. I feel gutted for them. I can't believe it. They only borrowed £ 80,000.00 approx 5 years ago. They remortgaged to raise 10,000.00 but suffured a penalty of £8000.00, crazy and all that interest they will pay over the lifetime of the mortgage. They want to move house and this will now severely limit their plans as to what size house they can aim for.

 

 

Any advice would be great!

 

 

Thank you

 

 

Anthony Theobald

[Seminole]

This issue has been covered quite a lot on the site. Try searching under "mortgage redemption penalties". In summary the jury is still out on this one but my view (and I also paid £8k to a mortgage company) is that they are probably irrecoverable.

[Robertxc]

This issue has been covered quite a lot on the site. Try searching under "mortgage redemption penalties". In summary the jury is still out on this one but my view (and I also paid £8k to a mortgage company) is that they are probably irrecoverable.

Do you mean irrecoverable by the bank, or by the consumer?

[jad]

Would it be worthwhile claiming back the penalties imposed by a mortgage lender for late payments etc in the same way as for banks/credit cards ??

 

Thanks

Jon

[Seminole]

Absolutely. I've just got £1,500 back from my old mortgage company.

 

One word of caution, however. Mortgage accounts do take a bit more management when they fall into arrears and it may be more difficult to satisfy a court that they are disproportionate. Also be a little careful about reclaiming charges for bounced transactions. You might be dealing with a bank but you are dealing with them in a capacity of receiving money, not bouncing the payment of it.

[jad]

Thanks.

 

In my case, this is for a mortgage held from 2003 to 2005, and a previous mortgage held with BOS from 2000 to 2003.

 

I'm don't have a mortgage now, so the lenders can't theaten anything against me,like repossing the house !

 

I'll start with the DPA letter to both, and see what is on the table...

[Seminole]

When you've got the results let us know and in particular how the charges are described.