Exit Fees for Buy-to-let mortgages

16/02/2007

(FSA) Financial Services Authority have introduced a type of deadline and mortgage lenders will have to take account of this. These new rules will be based on mortgage exit fees.

The Financial Services Authority said that mortgage lenders must stop hitting people with large exit fees. FSA feel that there is no need for this fee and something should be done.

FSA have stated that this unfairness should stop from 31st July 2007. ING Direct the research firm have found out that 11 million borrowers mainly Buy-to-let mortgage based are paying additional exit fees of nearly 2 billion pounds.

Robin Gordon Walker at FSA commented, "If a lender presents an exit fee as being to match the costs of the work of exiting the mortgage, he should ensure that it is just that cost and no more."

"If the cost charge is greater than the actual cost, then it is potentially a breach of the contract and could be unfair."

In the near future FSA are planning to look into sub-prime mortgages as borrowers are vulnerable and they are missing lucidity.

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