5k charged for Right to Consolidate?

by Readers Question

9:33 AM, 3rd April 2019
About 4 months ago

5k charged for Right to Consolidate?

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5k charged for Right to Consolidate?

Hi all, I am in process of selling a BTL with Mortgage Express. When my solicitor asked for a redemption statement they wrote back saying below:

“We have the right to consolidate and take all monies. However, on this occasion we will just charge £5k which will be used across overall portfolio.”

I am now thinking of not selling. My question is has anyone else had this issue? My solicitor is about to write to say we will not sell it then.

Once they get this letter will they drop the £5k charge as they will lose the option to redeem this mortgage in full?

Many thanks

Rav



Comments

Neil Patterson

9:38 AM, 3rd April 2019
About 4 months ago

Hi Rav,

My interpretation of the wording from MX is that if you redeem the mortgage on that property they will want to keep back 5K over and above the redemption statement to pay down loans across your portfolio held with them.

This must mean MX are reasonably happy with the overall LTV held with them.

Also I do not think this is a fee so will not be charged or held if you do not sell the property.

I would obviously check with MX as well though or it may now be Rosinca.

Ian Narbeth

10:42 AM, 3rd April 2019
About 4 months ago

Hi Rav
Are they charging £5K as a fee for redeeming on loan or are they requiring an additional £5K to be used to reduce your overall borrowing?

daniel blake

11:07 AM, 3rd April 2019
About 4 months ago

They initially did the same to me. It started at 10K, then they reduced it to £900 for some reason. Then they charged me daily interest 9 months prior to sale.

LVW4

11:23 AM, 3rd April 2019
About 4 months ago

Sounds like the sale will result in a higher loan to value figure across your portfolio, and therefore they are using the £5k to reduce it. I can't see £5k making much difference in the scheme of things, but if they do that to everyone, it's a nice little earner, as Arthur Daley used to say!

Dave Driver

12:01 PM, 3rd April 2019
About 4 months ago

I agree that this sucks. They're forcing you to reduce your borrowing against your will.
However, you'll have to sell or remortgage to redeem this mortgage at some point so you won't avoid this. The only way you could avoid it would be to redeem all your MX mortgages simultaneously. So perhaps you'd be as well to just accept it.

rav singh

12:28 PM, 3rd April 2019
About 4 months ago

Hi all

Yes the 5k will be used to reduce my other borrowing.

I wondered if I say I’m now not selling it (which I am considering) due to this 5k whether they will drop it realising they will not get this mortgage redeemed.

As I’m hoping on hearing that from my solicitor they will drop the 5k.

But my worry is from one of the posts here they may increase my monthly payments now if I don’t accept the 5k.

Ian Narbeth

13:42 PM, 3rd April 2019
About 4 months ago

Rav
I would accept their offer. MX could insist that all your borrowing is repaid before any security is released. This is a common problem that many borrowers are not aware of that the lender can treat every property charged to it as security for all the loans.

Anne Nixon

14:13 PM, 3rd April 2019
About 4 months ago

I'm just involved in exactly this now, or will be in a few weeks. Just to understand, so an extra £5k will be required by them from the proceeds of sale to reduce your over-all borrowing?
I guess if that left me paying a smidge less mortgage a month it wouldn't matter much.
I thought at first it was a charge and that would be out of order!

Dave Driver

14:23 PM, 3rd April 2019
About 4 months ago

To be completely clear, are all your MX mortgages still with MX? All mine were sold to Rosinca and as yet I haven't heard whether or not they are keen to enforce consolidation.

Anne Nixon

15:07 PM, 3rd April 2019
About 4 months ago

Reply to the comment left by Dave Driver at 03/04/2019 - 14:23
Mine are all Rosinca now too

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