Arrangement Fee Fun!

del34blue

I don't know whether this forms a question/request or just a 'heads up'.
We found a house, got an offer accepted. We then arranged a mortgage through HSBC, who charged us an arrangement fee (£800). The mortgage adviser was very keen to encourage us to sign up for 'HSBC Plus' (despite getting us to sign something that says we didn't take advice from her). She was less keen to mention the arrangement fee was non-refundable and, it would seem, completely nontransferable. However the non-refundable bit is mentioned in the key facts, so maybe we concede this to HSBC.

Our surveys highlighted non-standard construction and some work that needs doing. At this point we started to feel a little uncomfortable about the property (thinking about reselling and whether there might be anything seriously wrong with it). The bank at the same time requested a structural survey, but didn't seem to want to answer our questions about why they wanted it (didn't exactly ease our minds).

So we inquired about transferability of the mortgage and the HSBC adviser's response was, the mortgage can't be transferred and the fee is non-refundable. In addition, if HSBC decides, for any reason they don't want to provide the mortgage, off they go with the arrangement fee. We've tried negotiating with the estate agent/vendor about getting money off for work that needs doing on the house. They're not being co-operative, perhaps after we objected to them trying to get the surveys (we'd paid for) out of the bank without even asking us or our solicitors (another story...) .

All we've had so far is a badly-worded, slightly offensive email from the vendor, telling us he'd knock £2k of if we completed before a date that has now passed. We can't complete yet because HSBC hasn't given us the go ahead to drawdown on the mortgage (nor finished processing the structural assessment). In addition HSBC reckon have told us if we get any reduction in the price the mortgage will have to be rearranged (good news for HSBC I'm sure). The HSBC adviser did say that the way round this would be to pay the full amount and get the vendor to 'send us a check a cheque' afterwards. Needless to say we're not over moon about that idea.

At the moment we wonder whether just to loose the money and walk away.

IT_nerd

HSBC are !!!!. Nothing but trouble. I say cut your losses! But that's just based on my local branch

hostman

In the current market, I would suggest anyone applying for a mortgage (re-mortgage or first time buyer) adds the fee to their loan. If you're declined, you loose nothing, if you're accepted you pay £2 a month more, as you pay interest on the application fee.

HSBC want the structural survey to be certain the place isn't going to fall down and is therefore worth what you're paying for it and ultimately the amount their lending you.

The banks are !!!!!!s when it comes to mortgage application fee's and is one area the Government should legislate to improve the situation for borrowers. If you're declined, they should refund the fee. The banks will argue the fee pays for the underwriting process and that cost applies whether or not your application is approved. A fair point, but when some of these fees are £1999, that's a lot of money to loose for no gain.

Ian_Griffiths_Halifax

Should have used a broker :rolleyes:

By the way, the adviser telling you to get the money back off the vendor after completion might not go down well with their bosses. That is a Cashback on Completion, similar to the Vendor Deposit Scheme but the difference is that you would be finding all the deposit in this case, and then getting money back from them. It is still an incentive though and the solicitor would have to report it to the lender and they would still reduce the purchase price accordingly.

Tell them that you intend making a complaint regarding the fact that the mortgage is not transferrable to another property. Most lenders would just want the new property details and ask you to pay for another valuation on that property.

Tell them that you intend complaining as you don't think they are 'Treating their Customer Fairly'.

Margin_Walker

Not sure where your mortgage advisor has got his/her information from. There is no problem transferring an HSBC mortgage to a new property if your current one falls through.

Just ring them and they can transfer the application onto a new property as long as the loan to value is still within criteria and the loan amount is not increased. It will involve new offer documents being sent to you and your solicitors and a new valuation fee being paid if it wasn't a fee free package. As mentioned their booking fee is non refundable although you do have six months from the day you book the rate to complete.