Am I being stitched up?

Davesurf20

Hi everyone, I've recently been searching around for my first mortgage. I went to a local mortgage advisor and he bought up a whole list of mortgages to choose from. We went with RBS 2 year fixed at 6.99%, 35 year mortgage, interest only ( only til the 2 years is up then i'll do repayment.)

Arrangement fee (£999) added to mortgage, although not told that this fee was binding (so feel very misled by mortgage advisor).

Had survey done, all good. The final bits of paperwork have come through from RBS, so mortgage is approved and ready for us to sign. However, in the month since we first started looking, interest rates have come down, and RBS's in particular by 0.5%. Looking online I can find a 5.99% deal with Yorkshire BS.

Now RBS are giving me this ultimatum (through the mortagage advisor that I now don't trust) - take the mortgage offer and have the arrangement fee added as per requested. A 6.49% deal with them, but they want £1998 (arrangement fee for two mortgages), or leave them and try and get cheaper deal elsewhere, and here's the kicker - they still want the £999 fee if I leave them.

Is this for real? I've had a read through my paperwork and can't really make head nor tail of it. I'm thinking of going to the C.A.B. or my solicitors because I feel like between RBS and the mortgage advisor that they've had my pants down:mad:

Any advice on this matter greatfully recieved,

Cheers,
Dave Churcher

uncommonadvice

You are paranoid mate. Nothing really out of the ordinary here. It may be the case that YBS have a deal at 5.99% but that doesn't mean it was the right deal for you. Google "Think like a bank" and read the fee download at uncommonadvice

dwsjarcmcd

Usually if you choose to add fees then don't proceed for whatever reason you can walk away. There are plenty of threads on this. Can't speak for RBS's policy but check the wording of the KFI, it should specify exactly what is needed.

No idea what the post above this is on about!

Davesurf20

dwsjarcmcd wrote: »

Usually if you choose to add fees then don't proceed for whatever reason you can walk away. There are plenty of threads on this. Can't speak for RBS's policy but check the wording of the KFI, it should specify exactly what is needed.

No idea what the post above this is on about!

Sorry, whats a KFI?

Davesurf20

uncommonadvice wrote: »

You are paranoid mate. Nothing really out of the ordinary here. It may be the case that YBS have a deal at 5.99% but that doesn't mean it was the right deal for you. Google "Think like a bank" and read the fee download at uncommonadvice

Read it and learnt nothing. Sorry 'scanned' it and learnt nothing. Cheers tho

hostman

Davesurf20 wrote: »

Sorry, whats a KFI?

Key Facts Illustration

It will tell you important facts on your mortgage, i.e. costs, term, how much you'll pay per £1 borrowed, penalties etc.

Davesurf20

OK, I've read the KFI and it says:

Arrangement Fee
This fee is paid at the time the mortgage is arranged. This fee is non-refundable. This fee has been added to the mortgage. £999.00

So does that mean I now owe them a grand wether I sign the final paperwork or not? Also it says the offer expires after 3 months. So do I still owe the arrangement fee if it expires etc etc?

bengee1977

Davesurf20 wrote: »

The final bits of paperwork have come through from RBS, so mortgage is approved and ready for us to sign

So, have you actually signed yet?

Davesurf20

No not signed yet, but mortgage advisor is telling me that because they've 'arranged' the mortgage, that I now owe RBS £999. Signature or not. Like I say feeling very stitched up.

dwsjarcmcd

Davesurf20 wrote: »

Arrangement Fee
This fee is paid at the time the mortgage is arranged. This fee is non-refundable. This fee has been added to the mortgage. £999.00

Dave, is this an exact quote? If it is, then it sounds like it is non-refundable. Phone RBS tomorrow and ask, particularly if you don't trust your adviser. May help to 'suggest' that you don't look like completing on the property (keeping your options open!) Fair chance they won't budge though.

Locoblade

Am I right in saying that YBS only deal direct, in which case if you go with them your advisor will not get a broker fee? If so its worth speaking to them direct to ensure, as a lack of renumeration if you went there instead may explain why your broker is keen for you to continue with RBS rather than go with Yorkshire, and if he's desperate for the business he may be exaggerating their stance in an effort to sway you to stay.

Personally though I don't think its unreasonable for fees (or at least a portion of) to be non-refundable otherwise in a falling rate market everyone who didn't have an imminint fixed deadline to complete (remortgagers etc) would jump from pillar to post onto slightly cheaper deals every few weeks without ever completing, and the lenders would be doing the legwork preparing legal paperwork and doing surveys etc but end up doing it for nothing when its cancelled.