Mortgage fees

mum2g1b

Hope I am putting this in the right area and hope someone has some advice. Sorry its a bit long......

We recently came to the end of our fixed rate term on our mortgage so were looking for a new deal. After looking around we went to our bank and got a decent rate and a deal we were pleased with. We spent approx 3 hours in a couple of meetings going over our finances and what we wanted etc etc.
We agreed to a rate and signed the forms and they arranged an independent valuation. The mortgage fee was £999 which they took the day after we signed the forms agreeing to the offer(before the valuation). We also paid approx £300 for valuation survey.
Now the valuation came in at £380K (slightly lower than we had expected) however our LTV ratio was still 63%.

The bank then contacted us and said the mortgage product/rate they had offered was no longer applicable as our LTV ratio was above 60% now.

They came up with a new offer at a rate 0.2% higher.
HOWEVER and this is my issue they then said they would NOT refund the £999 mortgage fee but(!) would offset the new fee against the old fee- this basically means we lose £700!!!

I said NO way! How can they charge for a product they then withdrew?!!

Apparently it was in the smallprint- and yes I know we should have scoured the small print with a fine toothcomb but it seems completely immoral and unfair to charge for a product they then withdraw.

So it would appear they can change their minds and we lose money.
They took the fee before we had even had the valuation done- and when I asked about this they said it was to lock in the rate?! Well its not like buying shoes on sale- this mortgage offer didn't have an expiry date.

The valuation took less than 10 mins!!!

I have spoken several times to our mortgage manager and she has said she will appeal it but no-one gets back to us (surprise surprise).

So is there ANY way I can get this money back? How can they do business like this?

We have banked with them for 20 years because they have until now been brilliant and very fair- we lived overseas for 5 years and there were issues with bank transfers and we went overdrawn and they were great and didn't charge us etc.

I just want my money back:(

dunstonh

I said NO way! How can they charge for a product they then withdrew?!!

Because the fee is non-refundable. That's exactly what it means.

This is why most mortgage brokers will recommend that you add the fee to the mortgage as in most cases that means you only pay if the mortgage gets advanced. You can then repay the fee immediately after the mortgage is set up.

The problem is that you went direct to bank.

So is there ANY way I can get this money back? How can they do business like this?

You are reliant on their goodwill as there is no wrong doing.

handytips

First and foremost. Your bank does not give a fiddley dee about you, you are an account number and that is it, cold but true.
I think you have been mis advised and duped a little here. Which Bank/Lender are you with ?
There are very few mortgage products that will charge £999 up front and charge you an arrangement fee, there will be products out there where there will be little or no arrangement fee, free valuation and free legals, at 63% ltv you will be open to the best deals on the market that would have to be carefully researched according to your needs and preferences.
If you complain i can almost guarantee that the money will be refunded. This is it in a nutshell for you. When you go into a bank, the advisor is NOT allowed to advise, they can only say you can have this, this, or this. Then the choice is yours, if they advised you they are breaking FSA rules. I would pull out of any deal they have offered you and look elsewhere, a good broker will be able to source your mortgage via the Whole of Market (important question always ask if they are whole of market) and i can almost guarantee that your original product offered to you by your bank will be able to be beaten. Should you want any further advice please PM me and i will be more than happy to answer your questions.

handytips

sorry should read. £999 up front and charge you a valuation fee.

mum2g1b

Handy tips- thank you - we are complaining and have also complained to our "Premier' bank service(can you hear the sarcasm in my voice!!) but they seem happy to keep us on hold- however my husband has said we will take our accounts elsewhere- but I am sure they won't care!

I have to say i wanted to go through a broker but dh thought the bank offered us a good deal.

We weren't ever told that IF the valuation comes back lower then the rate would alter and the fee would be non refundable- now I am aware that I should have read more but to be honest after a few pages I was falling asleep- for which I am now paying the price!!


We will keep on complaining until they repay the money.

Just one more thing- I have a copy of the "independent valuation" that the bank had done on our house. If we withdraw and go elsewhere I don't suppose another bank/building society will take that as a valuation (as allegedly its independent) and save us paying for another valuation?

JimmyTheWig

mum2g1b wrote: »

They came up with a new offer at a rate 0.2% higher.
HOWEVER and this is my issue they then said they would NOT refund the £999 mortgage fee but(!) would offset the new fee against the old fee- this basically means we lose £700!!!

I'm slightly confused by this.
Are you saying that the new mortgage they are offering only has a £299 fee?

In which case do they have any other mortgages for your LTV that have a higher fee? You might be better going to one of those even if on the face of it you're not getting much more for the increased fee. (If that makes sense.)

mum2g1b

Yes the new mortgage they are now offering has a £299 fee.

Ha!! the Bank have just rung-
Handytips- you were right- the £700 difference is being refunded into our account tomorrow. Once we have the money we will see where we go from here but I suspect it will be somewhere else for a mortgage!

handytips

Like i said. I would certainly choose a product with a free valuation for you, as most remo products have a free valuation as standard. As for your valuation report it is doubtful whether another lender will accept it, however a new surveyor will probably value it the same, if the new surveyor downvals it further you have some pretty good evidence, so keep hold of the report as it could come in useful. I wish you all the luck in the world in getting your money back, i would also stick your neck out and try and get a refund on the valuation aswell.

JimmyTheWig

How long is the fixed/discount period for for this and the original mortgage?
If it's only a couple of years then there's almost no difference in what it will cost you, due to the difference in fee.
I'm not saying that you can't do better elsewhere, but if you were happy with the original deal then this one sounds good considering the increase in LTV.

I think you need to consider what you stand to lose (the £299 fee and valuation costs, presumably) by switching to a different lender.
What interest rate are they offering? Is it fixed or variable?

kingstreet

Give us a rough idea of the figures and product you're looking for and I'm sure we can come up with some ideas for you.