Mortgage broker fee.

bionicrobin

Hi, I was recently advised by a friend to use a mortgage advisor to get the best deal, so I looked through the yellow pages and found a local one. I went to see them and they started looking for a mortgage for me, first application got turned down, then I was offered one, which I accepted, so I now have a mortgage, all good. I then receive a letter from the mortgage advisor asking for £399 for broker service. The wording was "Further to our recent conversation I enclose an invoice for the purchase of...". There was no such recent conversation, and he never once mentioned any fees to be paid throughout the whole process. Should I not have been told about any fees before he started looking for a mortgage for me ?.

dwsjarcmcd

Yes you should and it should be clearly stated in the KFI you received when you first me them. Have a check through your documentation you received from the broker.

Senior_Paper_Monitor

The broker must provide you with an IDD (Initial Disclosure Document) detailing their standard fees (and whether these are refundable in any circumstances) at the beginning of your relationship, in the process of explaining their charge basis.

Any such fee and the commission that they will earn must also be declred within the KFI provided which lays out the basic terns of the mortgage being recommended/considered/applied for.

Any subsequent variation to such fees (perhaps in the event oif different circumstances becoming evident) must be advised to you in writing in advance.

In writing (in the three forms above) are all that counts - 'conversations' don't.

bionicrobin

Thanks for the replies, I will go through all the documents, but I'm almost certain there was nothing regarding any fees. And certainly none were discussed at any time.

bionicrobin

After checking through everything, I found I had missed something at the bottom of a document called "key facts about this mortgage"
It does state a £399 fee. I had missed this when reading it, probably because I was pretty stressed at the time. When I first went to them there was no mention of a fee, and at no time was one mentioned apart from this document. And I dont remember signing anything saying I agreed to this fee. Is that fair ?.

opinions4u

There should be a clear conversation that discusses fees. That should be the basis of any complaint. That said, it sounds like they have covered themselves with their documentation. You know the first question to ask next time!

Senior_Paper_Monitor

As o4u states, there should be a clear conversation about fees - this normally occurs during the initial factfind process (and coincides with providing the IDD).

Did you you get this 'Initial Disclosure Document' - labelled 'About our Services' and showing the Keyfacts logo ? Its provison is compulsory/

bionicrobin

Senior_Paper_Monitor wrote: »

As o4u states, there should be a clear conversation about fees - this normally occurs during the initial factfind process (and coincides with providing the IDD).

Did you you get this 'Initial Disclosure Document' - labelled 'About our Services' and showing the Keyfacts logo ? Its provison is compulsory/

The only document I have that mentions a fee is the one I got after the mortgage offer had been made. They never mentioned any fees prior to this. I feel somewhat misled.

Senior_Paper_Monitor

If there was no IDD the broker is clearly in the wrong - simply inserting it in the mortgage KFI is not sufficient.

If what you are saying is factually correct then you have reason to complain - just check all your proceeding documentation before launching!

FinAdv

Hi,

Some brokers dont discuss the fee but just put it in the document. The problem is that alot of people dont read the documents carefully and thats where they benefit.

But, having said that its the responsibility of the client to go through the documents carefully. You are buying a house so how can you ignore reading the legal documents? On the other hand, the brokers should definitely discuss the fee up front before even trying to get the application approved from the lender and only go ahead if you are happy with their fees.

There are very good chances that if your mortgage has been approved, people would pay the fee since they are desperate to get the mortgage especially in such tight market.

Do you have to pay the fee at this stage or do you have to pay if you decide to go ahead with the application?