Mortgage Application FEE of £599 !!

christopher_h

Hi,

After reading all the mortgage advice on Martin's site, today I got a quote from the free service he recommends 'London & Country' however, when the guy called me back with a quote, he just slipped in quite sneakily I thought (between all the fast figures he was hurling at me) there was an 'application fee' of £599.00 (which can be merged into the overall loan fugure).

So much for a free service......anybody any thoughts ?

My immediate reaction is to try another broker.

In anticipation.

Chris

KTF

That is probably the product fee for the mortgage rather than a payment to L&C themselves. Who was the lender and what deal did you go for as its easy to find out the cost on their website.

Also, if you can afford it, pay the product fees (and any other fees) upfront rather than having them added to the mortgage as it will save you paying the interest on them.

raeble

Yes I've noticed a lot of mortgages have application fees these days usually in the region on four to five hundred pounds. That does seem a bit pricey. Who was the lender?

tomstickland

You have to do the maths though - sometimes paying the upfront fee can save you money in the long run if the rates are good.

christopher_h

thanks for your replies guys......

The lender was Cheltenham & Gloucester and the guy at 'London & Country' did say it was the C&G fee but I'm suspicious.....

Cycnical moi :rolleyes:

Chris

Ian_W

Almost certainly a product fee by the lender - not a charge by L&C. So it doesn't matter which broker you use that fee will still be there for that particular product.

In case you're unaware, for the most competitive deals almost all lenders charge an arrangement, booking, product fee [the names do vary]. It's quite unusual to find the best rates without one of these type of fees attached. I presume the lenders charge these fees as the really low rates won't, on their own, cover marketing, admin and so on.

Look in the best buy tables in the newspapers and you'll see the fees listed with the best fixed, variables, trackers etc. 2 companies have 3.99% fixed out at the moment with a whopping 1.5% arr fee - £1500 on a typical £100K mortgage, so £599 is probably only a little above average.

herbiesjp

It is a C&G fee - if you do not believe them - pop into you local C&G and ask, or look on their website

tanith

I just remortgaged with Nationwide a fixed rate for 5yrs the arrangement fee was one of the lowest I have seen at £199

Good Luck

ReportInvestor

I agree with IW.

High fees are the easiest way for the mortgage providers to fight back against us tarts. It's the trend, and it isn't going to go away.

If we are being altruistic, it even enables them to be fairer on the ordinary, lazy borrower who doesn't switch with the help of MSE or a broker .

christopher_h

Thanks guys, I'll bear it all that in mind, your comments have definitely helped.

He did also say there was a slightly more expensive interest rate but the 'application cost' was half the price at £299......so I'll sleep on it and decide tomorrow.

Chris

KTF

You need to do the sums to work out which deal is better for you over the term. Sometimes the lower rate is not always the best if the fee is high.