What Constitutes an ERC?

[Beserker]

I am a little puzzled by this. It seems an obvious question but in the case of the Sub-Prime lenders I am a little lost. My mortgage is with Derbyshire Home Loans and the charges, if I get out this year, are mostly made up of interest. They do not call it a redemption charge. There are other charges for Solictors, etc.

Opinions please.

[gizmo111]

An ERC is a % of the loan that you pay when you redeem the loan, it is typically 6% in yr1, 5% in yr2, and 4% in yr3. This will be agreed in the original contract. It is a lump sum and only payable if you redeem your mortgage in the tie in period.

The charges and solicitors fees you refer to are these a result of arrears?

[Beserker]

No they would be as a result of leaving the mortgage within the ERC period.

 

Thanks for the reply, I will post more about it nearer the redemption time. Like so many I have to wait for defaults to clear on my credit record.

[unicorn96]

I am about to re-mortgage and move from Birmingham Midshires. As its just after a year, they want to charge £10,000 redemption. This is a huge amount. Is this acceptable? Also if i wanted to go after Kensington but don't have any paperwork am i best just to send an SAR and my £10. When they reply will the SAR include solicitors fees, redemtion fees etc. i am in Scotland

[gizmo111]

As its just after a year, they want to charge £10,000 redemption. This is a huge amount. Is this acceptable?

 

Not acceptable - but at the moment unchallengeable - is there no way you can wait until the tie in period is over, have you tried talking to BM about borrowing from them on a remortgae or further advance?

[unicorn96]

Thanks for the info. Unfortunately dont think BM will do that for us, have tried various routes but nothing. will prob have to pay the fee and hopefully one day be able to re-couperate the funds at a later date.