Claiming back remortgage fees?

A reader has recently remortgaged and wants to know if she can get back some of the fees her lenders have charged her for switching lenders and finding a new mortgage deal.

Brian Murphy, head of lending at the Mortgage Advice Bureau, offers his advice.

Julie from the West Midlands asks:

I have today heard that if in the last six years I have remortgaged or changed lenders that I may have been overcharged on admin fees and that I may be able to make a claim and be reimbursed.

Is this correct and if so who do I need to contact?

Thank You.

Brian at the Mortgage Advice Bureau responds:

When taking out a mortgage, borrowers are likely to pay a number of administration fees.

These can include arrangement fees as well as survey and evaluation fees and these will all be detailed in the mortgage offer.

When borrowers choose to remortgage or change lenders, they may find that they are susceptible to pay exit fees (also called early repayment charges) imposed by the lender.

Over a period of a number of years, some lenders sneakily imposed additional charges, sometimes called 'closing fees', on top of the exit fees. These were not detailed in borrowers' contracts and thus the client was not aware of the extra costs that they were paying.

In early 2007, these fees became high profile and some lenders agreed that in future, any costs of closing a deal would be well documented. Many major lenders now offer customers reimbursements of sum or all of the difference that they paid.

Julie, you should refer to your original documentation and see if these costs have been covered.

However, if you are not in possession of this, you still stand a fairly good chance of claiming back your old mortgage exit fees. You should return to your lender to discuss it through with them, as they are best placed to inform you how much you were charged and what your contract initially stated.

If you have a question for Brian or the myfinances.co.uk team of experts, go to the myfinances.co.uk Ask the Mortgage Expert section.

For more information on the issues discussed here, go to www.mortgageadvicebureau.com.

Mortgage Advice Bureau Limited is authorised and regulated by the Financial Services Authority for advising on and arranging mortgages.