Just saw this news bit about banks charging people extra fees when they take over someone else's mortgage. Seems kinda unfair, like they're double-dipping or something. Anyone dealt with this before, is it common practice or just another cash grab by the banks?
I've actually been through this myself, and while it feels unfair at first glance, there's a bit more to it:
- Banks usually charge these fees because taking over someone else's mortgage involves additional paperwork and legal checks.
- It's not exactly double-dipping since the original borrower paid their own fees upfront, and now the bank has to process a new borrower.
- Still, some banks definitely inflate these charges unnecessarily...so it's always worth shopping around or negotiating.
Not saying it's fair, but it's not purely a cash grab either—just standard banking bureaucracy.
Good points overall, but I'd add a couple things from experience:
- Definitely true that banks have legit reasons for these fees—paperwork, legal checks, and risk assessments aren't free. But I've seen some banks tack on vague "administrative" charges that seem pretty inflated. Always worth asking for a detailed breakdown of what exactly you're paying for.
- Also, keep in mind that taking over someone's mortgage isn't always straightforward. The bank has to reassess your financial situation as if you're applying fresh. If your credit or income situation isn't rock-solid, they might even bump up the interest rate or require additional insurance coverage.
- One client I worked with recently managed to negotiate down some of these fees just by politely pushing back and mentioning competitor rates. Banks don't advertise this openly, but there's usually some wiggle room if you ask nicely.
Bottom line: it's not purely a cash grab, but banks aren't charities either...so stay cautious and always double-check the fine print.
