Are some lenders waiving early redemption charges?

bclark

My Brother is looking to move house, he has to really, but he is tied into a mortgage for 9 more months that would require him to pay a couple of grands worth of early redemption charges. He could port the mortgage but his current lender, part of the Santander group, won't lend him much more.

He went to see an IFA who advised him that a number of Banks, his being one of them, are so desperate to get money back in that they would probably waive the redepmtion fee just to get his money back and that Governemtn backed banks are being encouraged to lend more than others at the moment to stimulate the market.

Does this sound right to you guys? I am always a bit worried that IFA's can tell people what they want to hear in order to encourage them to send business their way.

dunstonh

Does this sound right to you guys?

Technically it is correct but the number of banks doing this can be counted on one hand and it tends to be the weak ones. Santander is not weak.

I am always a bit worried that IFA's can tell people what they want to hear in order to encourage them to send business their way.

Accusing an adviser of fraud is a bit strong when you are getting the information 3rd party.

bclark

Who was accusing an adviser of fraud?

I was merely stating that they can tell people what they want to hear, like most sales people.

Accusing me of accusing someone of fraud is a bit strong, especially when you are going off a single post on a forum.

opinions4u

bclark wrote: »

My Brother is looking to move house, he has to really, but he is tied into a mortgage for 9 more months that would require him to pay a couple of grands worth of early redemption charges. He could port the mortgage but his current lender, part of the Santander group, won't lend him much more.

He should ask himself why they won't lend him much more. They could be giving him a better understanding of what he can genuinely afford than a more reckless lender does. Borrowing more than he can afford could cost him his house.

He went to see an IFA who advised him that a number of Banks, his being one of them, are so desperate to get money back in that they would probably waive the redepmtion fee just to get his money back

One or two are. Bradford & Bingley and their subsidiaries leap to mind. But there are specific circumstances for allowing this.

and that Governemtn backed banks are being encouraged to lend more than others at the moment to stimulate the market.

That will be why Halifax recently pulled all their 95% deals then.

I am always a bit worried that IFA's can tell people what they want to hear in order to encourage them to send business their way.

IFAs can say what they like, but if it's complete bull then they end up losing their right to trade!

Generalisations like that are a little OTT.

If the IFA (or Mortgage Adviser?) knows their trade, they will be telling your brother what options are specifically available to his circumstances. Not throwing in sweeping generalisations along the lines of "this is what you could have won".

Serious point: He shouldn't borrow more than he can really afford. Santander's prudence may be a positive thing for him.

beecher

You say your brother 'has to' move but does he really have to move to a more expensive house, which Abbey feel he can't afford? I think he should be looking at more affordable options, which would then allow him to hopefully port his present mortgage.

dunstonh

Who was accusing an adviser of fraud?

I was merely stating that they can tell people what they want to hear, like most sales people.

Accusing me of accusing someone of fraud is a bit strong, especially when you are going off a single post on a forum.

Your post said "I am always a bit worried that IFA's can tell people what they want to hear in order to encourage them to send business their way".

Telling someone what they want to hear rather than give them the truth would be committing fraud. If that is the case then you should report it. If it isnt, then it isnt fair to be accusing them of it.

We dont know what context it was said in.

Back on to your brother, if Santander dont want to lend then it suggests your brother is attempting to push the lending critieria too far or has a credit situation that puts him higher risk. Is what he wants to do sensible?

bclark

Yes my brother is pushing what he can borrow a fair bit but not so much that other lenders are not willing to lend even in the current climate.

Yes he does really have to move.

Lastly stating that an IFA may 'tell people what they want to hear' is not even close to accusing them of fraud. I am not saying or implying that they are outright lying but IFA's (who are often about as Independent as a Mummys boy) will often suggest products or approaches that will make them money. I have seen this happen myself, it is a common sales tactic much like a Car salesman trying to encourage a buyer that they don't really want a small runaround as a 4X4 will keep their kids safe. That isn't fraud but it is trying to influence the buyer.

opinions4u

bclark wrote: »

Lastly stating that an IFA may 'tell people what they want to hear' is not even close to accusing them of fraud.

While there may be a leap of logic required to get there you are basically implying that they will say things that are not true to achieve a sale.

I am not saying or implying that they are outright lying but IFA's (who are often about as Independent as a Mummys boy) will often suggest products or approaches that will make them money.

If that doesn't fit with independent and best advice, then you should report them to the FSA.

I have seen this happen myself, it is a common sales tactic much like a Car salesman trying to encourage a buyer that they don't really want a small runaround as a 4X4 will keep their kids safe. That isn't fraud but it is trying to influence the buyer.

A car salesman is not regulated.

An IFA is.

If an IFA falls short of the necessary standards of advice by guiding a customer to an inappropriate product he can lose his livelihood.

A car salesman doing the same will most likely get a bigger commission payout.

bclark

Yes there is a massive leap of faith to come to that conclusion and you seem to be making it because you want to. I am not saying that they are saying things that aren't true but I am implying that IFA's can neglect to give you all of the information or subtley steer you in a direction that suits them.

That doesn't involve any lies or fraud, it is tactics.

Obviously you are a perfect IFA who would happily always give the best advice to your customers even if it meant advising them to do nothing or to move to a product that gave you a lot less commission than a similar one but believe me you are not representative of some in your profession.

Now thanks for your comment but you are steering this thread down a path that it wasn't intended to go down. I came here to ask for advice for my brother about whether or not it was true that some lenders were waiving these fees. Thanks for your answer.

lynnexxxo

Your brother has only 9 months to go on his fixed rate, in the current market he'll be lucky to have sold his house by then, so no need to worry.

opinions4u

bclark wrote: »

Yes there is a massive leap of faith to come to that conclusion and you seem to be making it because you want to. I am not saying that they are saying things that aren't true but I am implying that IFA's can neglect to give you all of the information or subtley steer you in a direction that suits them.

Not if they cannot clearly substantiate and document reasons for doing it.

Obviously you are a perfect IFA who would happily always give the best advice to your customers even if it meant advising them to do nothing or to move to a product that gave you a lot less commission than a similar one but believe me you are not representative of some in your profession.

I am not and never have been an IFA. I have merely worked in an associated industry alongside IFAs and tied agents.

Now thanks for your comment but you are steering this thread down a path that it wasn't intended to go down. I came here to ask for advice for my brother about whether or not it was true that some lenders were waiving these fees. Thanks for your answer.

I made comments that fully replied to your original questions, but didn't feel that some of your other statements, implied or otherwise, should go unchallenged. This is an open forum and inappropriate comments can be interpreted as gospel by others reading a thread.

While I have no problem with you making your views on IFAs known, I would hope that those seeking expert advice would read those comments in the context of other people's views, not just your own.