New Homes Mortgage Helpline *rant*

SaverEmma

So, I'm buying a property through Homebuy Direct and was told I needed to call NHMH to get an affordability assessment done. All went through fine. They then sent round a IFA to discuss the mortgage products with me. She explained this all ok and I naively signed on the dotted line to cover the valuation and feees.

Fast forward to today when I had a bit of spare time and was reading through some MSE forums and found some not so great info on NHMH. I investigated by calling up some banks directly and found several better rates. When I called the IFA up she sounded rather put out that I had done this. Anyway, the deals were that much better that I have had to cancel the previous mortgage application through the IFA and start a new one directly with the bank. I was never told that I could actually do this and the HBD scheme seems to throw in massive complications at each step!

I have asked for a refund of the fees I paid, as the services were not clearly explained to me and at no point was I given another option. Naively, I hadn't actually expected a sales pitch when the IFA popped over so fell for it all hook, line and sinker. I have been told that just under half the fees are refundable.

Not a happy bunny. Does anyone have any advice on this? Is it legal to do this? It seems like theres been random admin fees chucked in that you dont have to pay for with banks and I've ended up with a lifetime membership(?!) to rubbish financial advice.

Am I just a mug or am I entitled to any of it back? Really cant afford these stupid extra fees

betmunch

In their defence, NHMH are not allowed to tell you about the Banks direct deals as they can only advise on whats available to them.

They should have made it clear they use a panel of lenders when they explained their Initial Disclosure Document to you. This also contains information about how they get paid.

Sounds like you have been caught out. You may be able to get some money back by kicking up a real stink, including making formal complaints about how they took advantage of your naivity and didnt explain the service to you in detail. However, you will likely find that you signature on something will state that you have read and understood everything.

I hope you have a good go at them though! Good luck

Muhasib

Saveremma - are the product rates you found out about from the banks specifically available if buying through Homebuy Direct??

SaverEmma

Thanks betmunch - I hope to kick up a real stink!

I think the problem lay in the confusion over needing an IFA - I guess I thought you had to use the one they offered and also that they really were independant -apparently they dont have access t orates as good as the banks do direct (eh!??)

Muhasib - yep, I've called the bank up and checked and they seem fine about the scheme, am in the process of getting a mortgage agreed in principle now. It just seems ridiculous- what the point of an IFA if they mislead you, charge you a whopping amount in fees and cant offer anything better than a speedy google!

Muhasib

SaverEmma wrote: »

Thanks betmunch - I hope to kick up a real stink!

I think the problem lay in the confusion over needing an IFA - I guess I thought you had to use the one they offered and also that they really were independant -apparently they dont have access t orates as good as the banks do direct (eh!??)

Muhasib - yep, I've called the bank up and checked and they seem fine about the scheme, am in the process of getting a mortgage agreed in principle now. It just seems ridiculous- what the point of an IFA if they mislead you, charge you a whopping amount in fees and cant offer anything better than a speedy google!

I guess the point the IFA would make is that they have experience of processing the applications with the scheme and of what problems the Homebuy Agent may throw back at you. Obviously with the scheme being discontinued shortly then any snags in the process now would be terminal to your application.

Have NHMH sold you any other forms of insurance yet? I bet you could get similar cover cheaper also.

ineedhelp2008

The bank may well be fine with it.....but if its not a HBD approved lender they won't lend you the money. Natwest, Halifax and some building societies are all they use.

cocomonkey_2

Hello there,

We are at completion stage on homebuy and we used NHMH. I would check all your facts before walking away from the advisor.
I agree they try every trick in the book to get as much from you as possible but the reason why is HBD is such a complicated process that it is worth paying the small fee - just not have to deal with the hassle.
You can only get a mortgage with Natwest, Halifax and Nationwide on the scheme. If your bank is neither of these - they will not process the application in full. Also be VERY careful - I presume you are buying a new build - if your lender downvalues the property (which is highly likely at the moment) the housebuilder may refuse to sell it to you and may want a second opinion so you may be forced to go with YET another lender.
Buying a house through HBD is a very complicated process as there are so many parties involved - I would not advise doing this yourself especially at this late stage in the scheme. NHMH do all the legwork for you which believe me having been through the process was a god send in the end. I am not saying they are perfect but the HBD scheme is a very particular scheme and you need experienced advisors on this and a solicitor with HBD experience otherwise it can end up a complete pig's ear. If you want this to go as smoothly and quickly as possible I wouldn't rock the boat on this.
Also re@ insurance - we were sold life assurance early on but you get a cooling off period once you exchange contracts and you can cancel and get a better rate on line - what I have just done - so don't worry about that.
Hope that helps

sophievenusdoom

SaverEmma wrote: »

So, I'm buying a property through Homebuy Direct and was told I needed to call NHMH to get an affordability assessment done. All went through fine. They then sent round a IFA to discuss the mortgage products with me. She explained this all ok and I naively signed on the dotted line to cover the valuation and feees.

Fast forward to today when I had a bit of spare time and was reading through some MSE forums and found some not so great info on NHMH. I investigated by calling up some banks directly and found several better rates. When I called the IFA up she sounded rather put out that I had done this. Anyway, the deals were that much better that I have had to cancel the previous mortgage application through the IFA and start a new one directly with the bank. I was never told that I could actually do this and the HBD scheme seems to throw in massive complications at each step!

I have asked for a refund of the fees I paid, as the services were not clearly explained to me and at no point was I given another option. Naively, I hadn't actually expected a sales pitch when the IFA popped over so fell for it all hook, line and sinker. I have been told that just under half the fees are refundable.

Not a happy bunny. Does anyone have any advice on this? Is it legal to do this? It seems like theres been random admin fees chucked in that you dont have to pay for with banks and I've ended up with a lifetime membership(?!) to rubbish financial advice.

Am I just a mug or am I entitled to any of it back? Really cant afford these stupid extra fees

It is unusual for an IFA to charge YOU fees as they usually get these back via commission from the mortgage lender.

Whilst I sympathise with your predicament, I think that owing to the fact you have signed paperwork, you don't really have a leg to stand on

sophievenusdoom

SaverEmma wrote: »

Thanks betmunch - I hope to kick up a real stink!

I think the problem lay in the confusion over needing an IFA - I guess I thought you had to use the one they offered and also that they really were independant -apparently they dont have access t orates as good as the banks do direct (eh!??)

Muhasib - yep, I've called the bank up and checked and they seem fine about the scheme, am in the process of getting a mortgage agreed in principle now. It just seems ridiculous- what the point of an IFA if they mislead you, charge you a whopping amount in fees and cant offer anything better than a speedy google!

Not all IFA's are the same. I had a wonderful IFA recommended to me by a family member who took care of every query that I had. He didn't charge me a penny as he redeemed his fees from The Halifax direct, in turn I added his agency to my existing life policy when I increased my sum assured so that he would get the commission from that as well. A decent IFA will search out the best deals for you, but if they are what is called a tied adviser (which means they cannot offer you products from the whole of the market), they are limited as to what they can sell you.

cocomonkey_2

I couldn't comment on NHMH's access to rates for a "normal" house sale - HOWEVER on homebuy direct you can only use THREE lenders - regardless of who your IFA is.
With homebuy there are 3 charges on your mortgage - you, the homebuy agent and the developer. This creates a complicated process of having to deal with 3 parties and many lenders don't like this. Only Natwest, Halifax and Nationwide will take on a homebuy mortgage.

Muhasib

sorry cocomonkey - are you sure its just 3 lenders?? is this what NHMH have told you?

how about:

http://www.teachersbs.co.uk/mortgages/homebuy/index.asp

or this

http://www.newbury.co.uk/mortgages/products/3-year-variable-homebuy-direct.html


There are also other regional building societies out there lending on the scheme.