Mortgage Booking Fee - unfair charge

reader61

I have been unfortunate enough to pay a £250 fee to a mortgage company called Godiva who subsequently refuse to loan. The reason for refusal is they claim the 100k mortgage is not secure as the flat (market value 160k) is near a commercial premises (restaurant). How can i fight this or get a refund, they state refunds are not available, yet their policy of not loaning under such conditions is not stated anywhere.

GMS

Did you apply direct or through a broker?

Flats above commercial are restricted to 75% max LTV IF they will lend at all which they wont with certain commercial premises.

A broker should have had the property agreed up front

Leon_W

Mortgages are always subject to valuation so it's not unheard of for an application to be declined if the property is unsuitable security. As the valuation has been carried out there is no refund (which will be clearly stated on the Key Features).

In fairness, Godiva (Coventry building Society) are only going on the valuers comments so it is the valuer who has flagged up the restaurant problem.

I suspect the mortgage is being arranged by a broker. Did you inform him/her that there was a restaurant nearby ?

Leon_W

As GMS states, there is always going to be a problem with OVER a restraunt but you say "near". How near is near ?

I once had a client declined because the house was near a petrol station. Nobody mentioned it to me and I'm not a mind reader. It's impossible to cover every possible scenario. These things happen.

reader61

I dealt via a broker, I am learning he is young and probably inexperienced. The valuer stated the commercial premises as a public house, its not, its a restaurant. The restaurant is on the same road as the flat and about 40 feet from the main wall. The flat is purpose built and on the 3rd floor.

Thrugelmir

reader61 wrote: »

yet their policy of not loaning under such conditions is not stated anywhere.

Yes it is. On the website. Found this in a minute.

Flats above shops will be restricted to a maximum LTV of 75% and dependent upon the nature of the business we will not be able to lend at all.

betmunch

Sounds like its one of those ones that falls foul of the "subject to surveyors comments" line.

If the surveyor has stated that (for example) this property may have a problem on resale due to the close proximity of a xxxxxx restaurant. Or something similar then the case will be declined.

The Booking fee is payable up front and non refundable, it will be stated in the KFI. Cant see you getting far with this, but if you do please tell us what happened!

GMS

It all boils down to valuers comments which can be from one extreme to the other.

For instance a flat within 40 feet of a 5 star fine dining establishment could be viewed as desirable, yet the same valuer may say an identical flat within 100 feet of a kebab shop is undesirable.

Did the flat value at 160k or was this your estimate?

betmunch

Sorry, cross posted.

Was the broker made aware the property is close to a restaurant?

If it was a restaurant and not a pub why did the valuer put this? this could be challenged, however it may be immaterial to Godiva

Thrugelmir

betmunch wrote: »

If it was a restaurant and not a pub why did the valuer put this? this could be challenged, however it may be immaterial to Godiva

Depends on your definition of public house. As many "pubs" have become primarily restaurants. So distinction is increasingly blurred.

Leon_W

As I suspected then.

Valuers comments.


There is nothing you can do to prevent this. With the greatest will in the world the broker wouldn't know what the valuer is going to say and neither would Godiva. The latter can only act on what the valuer says and if they are nervous about it they wont lend which is what the valuation is for in the first place.

Look on it as a positive and they have done you a favour. You wouldn't want to be buying a flat that you may find hard to sell because nobody could get a mortgage on it. £250 well spent if you ask me.