Unreasonable Mortgage Setup & Valuation Fees

kittykat

My partner and I are in the process of buying a house. We have applied to Abbe for a mortgage as theirs' is the best rate at present for us (4.24% tracked for 2 years). The rules all seem to change though because the house is valued at over £500k. Despite the fact that we are borrowing less than a third of the property value. They are trying to charge (a) £699 as an administration fee and (b) £615 as a "Valuation Survey" fee - so total mortgage setup fees of over £1,300 by the time we have paid another £30 bank transfer fee! The property is brand new and the valuation surveyor paid his visit yesterday - he drove up to the property, confirmed that it did actually exist and then telephoned the local estate agent (who would have been marketing the property had we not bought directly from the builder) to confirm the valuation we had stated on the application. With previous mortgages (where the property had been valued at <£500K) the valuation survey is refunded. My broker agrees that the charge is unreasonable and I should comlplain direct to Abbey to try & get the charge refunded. Basically they have not actually done anything and they want £615 for not doing it! Has anyone ever challenged this - successfully or otherwise and my broker seems to think I am the first - I find that very hard to believe!!!!!

payless

Lifted from Abbey Guide

1 Valuation for Mortgage Purposes

This produces a report that is designed just for lending purposes. Thesurveyor will only do a brief inspection. In fact, some parts of the propertymight not be examined at all. As a result, the report won’t contain muchdetail about the condition or defects of the property.You’ll be given a copy of the report. Don’t rely on it as an assessment of thecondition of the property. If you need that kind of information please ask fora Home View or Private Building Survey.

Abbey valuation fees - These include a non-refundable mortgage set-up fee of £90.

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Some builders sometimes cover cost of valuation ( although may mean using their adviser , which may not always make sense)
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some lenders don't charge for the valuation of new builds , and yes others may offer free or refund on different rates - in fact even Abbey have "homebuyer solution " products with free valuation - but at higher rates ( a matter of number crunching which is best)

BUT surely these fees were all informed upfront, and your broker should have taken them into account when recommending that particular deal ( which he likely did , for example would you pay 0.25% pa more for a free valuation .. ??that would have cost say £1000 over 2 yrs on a £200K mtg)

assume you have not paid the £699 a/f upfront ?? - less risky to add on completion ( borrow £700 less if don't want to pay interest on added fees)

WHA

If you knew of the fees beforehand then I can't see how you can complain - high fees low interest is the deal. That doesn't stop you asking them to informally reconsider or waive the fees as a goodwill gesture, but I certainly don't think you have any contractual or legal right to a refund or reduction.

nrsql

I believe the valuer will just say if the property is worth what you said it was.
As you are not borrowing much you could have said the property was worth at least £300k and the valuer would have said yes it's worth that.

At least that's what's happened when I've discussed with mortgage companies - the valuer doesn't give a value unless it's less than you state.

ManAtHome

If you think it's unreasonable, go somewhere else. The 'best value' calculation will never be purely on interest rates - lenders have different 'add-ons' the same as every other retailer (postage, fuel surcharges, redemption fees etc). Headline rates/charges for all businesses are often pitched on the low side to attract customers, it's only when (or more depressingly IF) you read the T&Cs that the 'sting' turns up.

AndrewSmith

All mortgage valuations are carried out in the same way. The valuer will, in the first instance, be instructed to carry out a 'drive by' valuation. If the property is dis-similar to others around it he may then make an appointment to visit internally to gain details of the property size and square footage.

He will then go to local estate agents and ask for comparable property evidence of similar properties which have acually sold in the area recently (remember he asks for comparisons of the SOLD price not the MARKETED price. Since a property is worth only what someone is prepared to pay for it, this is a true reflection of the real market value).

You must remember that the valuation is not carried out on your behalf but is for the lender to decide if the property is 'suitable security for mortgage purposes'. The costs for this are what they are, you would have been told about them at the beginning (as I would assume you sent them payment before the valuation was carried out).

I'm afraid that you have almost no chance at all of Abbey refunding or reducing these fees. Why should they? If they don't lend to you they will lend the money to someone else. Can't have you cake and eat it I'm afraid.

Also can't understand why your broker has told you to complain and try to get the fees reduced.

Hope this helps, sorry if it sounds like a lecture )

Andy

stanmoresaver

nrsql wrote:

I believe the valuer will just say if the property is worth what you said it was.
As you are not borrowing much you could have said the property was worth at least £300k and the valuer would have said yes it's worth that.

At least that's what's happened when I've discussed with mortgage companies - the valuer doesn't give a value unless it's less than you state.[/QUOTE


To be Honest- It's common practice from an experienced broker to advise clients to under-value their Houses value to below the £500k threshold.


Thats the value of paying someone who knows what to do.

AndrewSmith

Precisely, and well said.

Andy

stanmoresaver

Actually, I've just read the original post and I realise I've gone along the re-mortgage route.

The Application will ask for the Purchase price and reducing this would require you to apply fraudulantly!!!


There is very little that can be done with regard to the cost of Val fee's except voting with your feet- Specifically ask your broker to justify his recommendation based on overall cost- He should be able to show you a copy of the schemes he considered and justify why he reommended the Abbey. The initial costs can often negate the rate benefit- and obviously the lower the mortgage size in relation to the house price,the greater likelihood of this.

dunstonh

A big generalisation is that most mortgage deals (from a provider) will more or less work out the same over a 5 year period. Some will have higher fees but better rates, some will have no fees but higher rates.

The fees are published up front and everyone looks at the costs before deciding which route to take so I cannot see a problem with this.

Also, it may cost a lot in your eyes to value a house but the person doing the valuation may have had to drive a long distance to get there, has a chunk of admin to do and does provide a (fairly simple) report to the lender. Some properties are going to be easier than others and your case it appears easier. However, a standard charge has to take into account all the difficult ones as well.

Nick_C_4

Well, I had a very positive lender's valuation experience. We had an offer on a house a couple of years ago. Our mortgage was with Leeds and Holbeck, and I think the valuation was about £300. The report was so detailed, it highlighted several areas of concern to us, and when the vendors refused to negotiate on price, we pulled out. The valuer had clearly been all over the house, even up in the loft. We were in the middle of arranging a full structural survey, so it saved us a lot of money. Well done that person :T