Mortgage account fee - !!!!!!

RetroBob

I met with two MAs who both recommended the same mortgage. 4.99%, no arrangement fee, no valuation fee and £250 towards conveyancing fees. Reading the Key Facts document sent today, I saw a fee for "Mortgage Account Fee" of £225. How is this different to the arrangement fee?

There is also a "Lenders Conveyancing Fee payable to the solicitor". I've spoken to several solicitors and they want to charge £100-£150 for dealing with a lender. Is this the same fee as none have mentioned anything else when pressed to confirm any additional fees?

patch3228

Was it with Abbey by any chance ... and what LTV are you looking at?

RetroBob

Yes it is - 75%

Richard_Webster

I met with two MAs who both recommended the same mortgage. 4.99%, no arrangement fee, no valuation fee and £250 towards conveyancing fees. Reading the Key Facts document sent today, I saw a fee for "Mortgage Account Fee" of £225. How is this different to the arrangement fee?

There is also a "Lenders Conveyancing Fee payable to the solicitor". I've spoken to several solicitors and they want to charge £100-£150 for dealing with a lender. Is this the same fee as none have mentioned anything else when pressed to confirm any additional fees?

The fees shown that I have coloured green will appear in the formal mortgage offer and these are used to calculate the APR so that a fair comparison can be made between different products from various lenders. Otherwise a lender could quote a lower interest rate but slap on a high initial fee. This would make the APR higher.

Now I mention this because part of the calculation has to include the cost f the conveyancing in relation to the mortgage. You will see in the formal mortgage offer that it will say that the figure for the conveyancing costs is only an estimate and it could be higher or lower.

So there are three possibilities as far as your solicitor is concerned:

1. He may charge the same figure as mentioned by the lender in the offer and use it as an excuse to up his overall fees For most lenders and most borrowers the figures shown on the mortgage offer will be between £100 and £200. However one or two lenders will put in a much higher figure of say £400-£500 and some of the "on-line" solicitors will take the opportunity to charge that fee even though they are perhaps only charging say £250 for the conveyancing on the purchase! What a rip-off!

2. He may charge a separate fee for dealing with the legal work on the mortgage, which will typically be between £75 and £150 plus VAT, but not necessarily the same as mentioned in the mortgage offer.

3. He may have given you a figure for legal fees on a purchase which includes the legal work on the mortgage if you are having a mortgage on the property. This is what I do, because I think it is fairer, even though the overall figure will be higher. I think most people when they see "Purchase Conveyancing Fees £295 plus VAT" don't realise they will probably have to pay extra for the legal work in relation to the mortgage - they didn't think that there was anything separate that needed to be charged for. Of course the on-line boys can justify it - but in my view it leaves a bad taste in the mouth.

RetroBob

Thank you Richard.

TroJon

RetroBob wrote: »

I met with two MAs who both recommended the same mortgage. 4.99%, no arrangement fee, no valuation fee and £250 towards conveyancing fees. Reading the Key Facts document sent today, I saw a fee for "Mortgage Account Fee" of £225. How is this different to the arrangement fee?

Fairly standard to have a mortgage account fee of around £200-300+

Further to that, a lot of different other fees, in general what this product doesn't have (what it means by no arrangement fee) is probably the product fee. This is generally £300-£1500+ or a percentage based fee such as the typical 2.5% on a buy to let.

Hope that helps!