2nd thoughts regarding broker

ultimatim

Hi all,
i am having 2nd thoughts regarding the mortgage deal i was offered by a broker.Can anyone help regarding my rights on cancellation?

I am currently with mortgage express and my rate rises to 7% next month

New deal is variable 1.8% above base so currently 6.8% this is with borrowing £12k on top

My monthly payments will rise from £842 to £944

Overall cost for comparison 7.3%

Only noticed that broker is charging £1500 after he had gone!

No fee was mentioned in conversation and i was suffering with a migraine at the time so i could not read the text and stupidly signed forms put in front of me

This is all too confusing to me and would appreciate any comments regarding if its worth switching or if i should swallow any fees due and stick with my current deal

Many thx
tim.

Tiddler_2

Did the broker give you a Keyfacts document - called an Initial Disclosure Document (IDD) ?
This explains the service they offer - whether they are whole of market, work from a panel of lenders, whether they give advice and a recommendation, and if any fees are charged and any refund policy.

I'm guessing that he hasn't charged the fee upfront, so it may well be that you can cancel without incurring any charges.

The broker should have also given you an illustration for the new mortgage, this will tell you the fees payable - is the fee payable to the mortgage company, or is it payable to the broker?

How much is the new mortgage for? What is approximate valuation of your property?
Which lender has he recommended?
Is there anything unusual in your circumstances? (such as any adverse credit, are you having to self-certify your income)

ultimatim

Thx for your reply tiddler,

Yes he gave me the document on the first visit.

On the document it states a fee of 1% of the mortgage advance.

He did take my credit card details for an upfront booking fee £199.

It states his fee is charged on completion.

On the refund of fees section it states: if we charge you a fee and your mortgage does not go ahead,you will recieve:
No refund if you decide not to accept my recommendation or you withdraw the application

On the mortgage illustration it states £1500 to the broker and £1000 to mortgage company

New mortgage is for £129,150.00

Approx property value £200,000.00

He recommended GODIVA mortgages ltd

My credit history is poor/average and i am self certing

Many thx
tim.

depurnell

You can cancel the application as the £1,500 fee is payable when the mortgage completes.

The advice may be sound but you could speak to a low fee or fee free adviser who should be able to do the same deal for you.

minimike2

depurnell......you still have not added the correct signiture to your profile. despite being asked to numerous times by a handfull of brokers. Please see the sticky thread RE the forum conduct for brokers.

OP - I would question why they are charging £1500 when the IDD says 1% and your mortgage is £129,150.

To be honest you could go to another broker who would probably do this on a commission only basis - you will lose the £199 you already paid, but thats better than paying £1500 extra, so look at it as saving £1300.

Ian_Griffiths_Halifax

I wouldn't touch a mortgage like that for a client without charging a fee, but 1% (which would only be £1291.50 and not £1500) is excessive.

If I were you, I'd get somebody else to do it.

Tiddler_2

As the other guys have said the fee is pretty steep. And you could get a similar/same deal from another broker for a much lower fee.

Unfortunately most brokers are suffering severe reductions in their incomes and some see the way to get this back on track is to charge a higher fee. I would never use anybody who charges a %age fee. I prefer a flat fee as it is fairer, because, generally speaking, there is no more work involved in getting a mortgage for £130k, than there is in getting a mortgage for £50k, yet they are charging you £800 more!!

herbiesjp

Why do you need to self cert?

Has the deal already been agreed for you i.e credit checked?