Another unjustifiable rip off charge

Poppycat

Took a mortage out via broker on 14th Nov, the arrangement fee then was £99. Wind forward 3 weeks and not get told arrangement fee is £599.

I now have to pay that or dont get it, I am commited now so have no choice.

Well it now appears on my mortgage offer

9. INSURANCE

Insurnace you must take out through xxxx mortgage services-first nation or xxxx mortgage services

You are not required to buy any insurance through xxxx mortgage services-first national.

Insurance you must take out as a condition of this mortgage but you do not ave to take out through xxx mortgage servcies-first national

Buildings
If building insurance is not taken out through xxx country mortgage-first national then a charge of £25 wil be payable upon completion


When I got the keyfacts I also took out building/contents, insurnace if we die whatever its called and if my OH looses there job.

It has on of the the insurance (buildings) xxxxxx mortgage services


My questions how can they justify this £25, I dont expect to go to Tesco buy some food and be told because I have purchased xxxx I have to pay more.

Excuse the mistakes if any I am angry that these companies/brokers can rip people off like this or not forth coming with the truth

toonfish

it's a standard charge to cover the cost of them checking that your buildings insuarance is suitable and in force. The lender is simply protecting their interest.

Poppycat

Okay thanks toonfish, its just on the keyfacts this was not explained properly, I still think its a rip off to check that I do have insurnace

Sting_2

I had to pay £25 when I took out my mortgage with the Alliance and Leicester and refused their insurance cover. I am annoyed at having to pay it, but I more than recovered the costs in the first year buy getting insurance cheaper elsewhere.

I asked what the £25 charge was for, the woman looked blank and explained it was to do with them checking insurance was in place etc etc. I have changed insurance companies several times and A+L have never contacted me to ask who I am insured with. I personally don't believe they do anything for this money.

I do wonder though, if my house was wrecked and my insurance company said I was underinsured would A+L be liable since they charge to check my insurance is in place.

peterbaker

Poppycat, yes the £25 is a pure rip-off.

They wouldn't know what to look for to decide whether your own insurance was 'suitable' or not!

Ask your existing or preferred insurer if they would mind paying it. A number of them have done so over the years since these spurious admin charges started appearing.

The arrangement fee on the mortgage is also a pure rip off of course. £600 is the amount of interest you would pay in a year on £10,000 of your mortgage if the mortgage rate was 6% !

Might be worth speaking to the FSA and asking what they think of the practice of one of their regulated mortgage-brokers hiking the rate in this way. Depending on what they say, you might be able to get the mortgage broker to reconsider their position.

Poppycat

Thanks for the advice, I see there actually two separate issues although connected.

On the keyfacts the wording gives misleading information

Buildings
If building insurance is not taken out through xxx country mortgage-first national then a charge of £25 will be payable upon completion

2. How can they justify £25 to see a piece of paper for the house have building insurance?

It does nothing because there nowt to stop a person cancelling insurance 2 months or a year down the line

So I now have 3 complaints that will have to be make.

1. the insurance charge
2. The extra £500 for a arrangement fee (looks like the broker and the xxxxx mortgage centre are at fault not not informing me at the time.
3. Exit fee from Halifax of £175. As I took out a repayment mortgage in 2003 having been advised I was mis-sold a endowment policy. So we took out a repayment mortgage and the Halifax said at the time they will waive any fees because of our circumstances.

I really hate the aggravation, but why should companies get away with misleading information, I wont to be told the truth of all charges and not 3 weeks later come back and say but it will costs you £599 instead of £99.

Poppycat

I just been on phone to lender they told my there arrangment fees have always been £599, thats a different story I got told 1st it was £99 then it suddenly went up 3 days later after the keyfacts to £599 as it was an offer at £99 prior to 17th Nov.

peterbaker

All good fun eh? Fees for breathing the air in their office soon I bet!

The exit fees (whilst not as high as mine) are also a complete rip-off (this is not penalty charges is it, 'cos I they got outlawed if they went beyond any special rate promotion period?). Anyway, there was no such thing until the new millennium I think, only early redemption penalty nonsense!

My 'exit fee' with Barclays/Woolwich has neatly doubled I think since I took the deal less than 2 years ago. They will feel the lash of my tongue if I decide to exit and they try to apply it! I've been with them 30 years for banking God Bless them, and they usually cave in when I get upset:-) ....

...(and so they flippin' should).

Madjock

The insurance charge is normal, and £25 is pretty cheap. As I've said before, many lenders charge up to £50 for this. They DO know what to check to make sure the policy is suitable. Part of the solicitor's job is to provide the pertinent information and that's what things like mining and drainage searches are for. Yes, you can cancel it after you've completed, but on your on head be it should anything happen to your house that made it unmortgageable.
The fees that Halifax waived would have been for arranging the mortgage, not redeeming it.

READ ALL OF THE KEY FACTS AND READ ALL OF THE MORTGAGE OFFER. THAT'S WHAT IT'S FOR.

peterbaker

Madjock wrote:

READ ALL OF THE KEY FACTS AND READ ALL OF THE MORTGAGE OFFER. THAT'S WHAT IT'S FOR.

Pardon?? And you are?

Poppycat

I read the keyfacts, the fact is they are misleading. It states on the KFI

If building insurance is not taken out through xxx country mortgage-first national then a charge of £25 will be payable upon completion

I paid for building insurance from them, it stated on the insurance document xxx mortgage centre. They also charging me £599 instead of what mentioned on the KFI, again misleading. The bank claims there £599 has always been that, I was told by the mortgage centre that it was an offer which ended on the 17/11 3 days after I applied. Some one messed up and they expect me to pay for there mistakes, eh no I wont.

Even with the £25 charge, how can any company justify that charge just to see that you have insurance? its another unjustifiable charge and I will be challenging this, I don't like being ripped off particularly as I have very little money, its particularly sickening when they rip off merchants make vast amounts of money at my expense.