Help!! A hidden fee as appeared?!

Linz2012

Hello all,

Me & my partner are currently buying our first home for £78,000 we have the 10% deposit & the solicitor fees, We've been credit checked by our Mortgage company - All is going fine & we're on our way there.

Until ...

I popped into our Estate Agent today & noticed a card regarding them helping us find a Mortgage etc which we have already done. In the small print it mentions they charge 1.95% on the selling price. Which is just a little over £1500 for us. I was not aware that there were a charge for this, I thought it was all apart of buying with that Estate Agent, I was never told that we had to pay.

I do not have £1500 left to pay our, & I really want our 'this' house - We've been waiting 10 years for this moment, I cannot let it go.

Where do we go from here? i heard you can have it put onto of your Mortgage so we'd be having one for £79,500 & would just need another £150 on the deposit. Is that correct, Can it be done.

Please advice, I;m in a moment of panic, I'm a first time buying & have really relied on my Estate Agent to give me all & correct information.

Thrugelmir

Carefully read the documentation that you have signed in respect of the mortgage application.

_Andy_

Are you absolutely sure this referred to purchases and not the fee the EA would charge a seller for marketing the house?

ACG

2% is a LOT for a Mortgage adivsor to take.
I would presume this is the estate agents fee - that can be closer to 2-3%

Its not uncommon for a Mortgage advisor to take a fee, i do (in some cases) - but i would never take anything close to £1500. You will have been given a document at the first meeting which explains what they do, how they are covered by the FSA, complaints address, how they are paid and the products they offer (its around 3-5 pages), read that and see what it says regarding their fee...and which box is ticked.

Linz2012

Thank you for your replys.

It seems that I have not been given any documentation from them in regards to what their costings are - I have had no documents or any paperwork.

Everything as happened by phone, & I never heard them mention a fee - Not you have mentioned document, When I saw a MA in the middle of the year he gave me a document saying that they do not charge. I think I've got to excited about getting the house that it have no crossed my mind.

If seen the cost on a leaflet which I saw in their shop today, It might not even be referring to me, But it says 'Mortgage services' which I am using.

It says the following:
'You can choose how you pay for your mortgage advice. You have the option to pay a fee typically 1.95% of loan amount. Alternatively you could pay by combination of a 1% fee and allow us to receive commission from the lender.' This leaflet is not something that was handed to me its was I saw myself in the show & picked up.

If it helps it via Darlows, & Spicerhaarts.

kingstreet

To provide an "advised" mortgage service, these are the steps which should be followed;-

- at early point in contact, adviser should provide potential client with Initial Disclosure Document* (IDD) which sets out status of firm, service to be provided, remuneration, complaints route and compensation process

- agreement* to any fee payment should be reached and signed by borrower

- adviser should satisfy "know your customer" rules, normally satisfied by completion of fact-find and discussion with borrower about needs/requirements

- a Key Facts Illustration* (KFI) setting out full terms of mortgage, including term, amount, rate, repayment method, fees (including those payable to adviser firm), penalties, follow-on etc should be provided BEFORE the borrower commits to a particular mortgage deal

- a suitability* or "reasons why" letter is given to borrower setting out why this offer best suits his/her needs and why others failed to do so. Notes taken in fact-find influencing choice/decision should be referred to

- an application should be submitted resulting in a mortgage offer which confirms the details set out in the Key Facts Illustration (including adviser fees)

- the purchase and mortgage is completed.

Could you look through the documents you have received and try to establish what you have, or haven't been given. Items marked * should have been provided by adviser/broker.

As an example, I do not proceed without;-

- signed and dated front page of IDD
- signed and dated fact-find
- signed and dated front page of KFI
- signed fee agreement (if applicable)
- signed reasons why letter.

Linz2012

Very informative reply.

Its explain its all.

I have no paperwork at all from at all from them. Just an email asking which document so send to then eg Wages slips, P60 etc.

ACG

What Kingstreet has said is spot on....however just be aware that not all advisors work exactly like that.

For instance, my compliance department dont require or ask for me to get signed documents. So whilst i do have to give all of those clients and save copies for my records, i dont have to get them signed by my client.

But the IDD is the document which is primarily what your looking for.

ACG

Sorry just seen you response above....it must hve taken me 10 minutes to write that.

Theyre not following the correct procedure.

I would be inclined to write a letter stating that you have spoken with a number of Advisors and they have informed you that the correct procedure is to give documentation stating all of the information i as a client should be made aware of. This has not been given, as has no other documentation which i should have been provided with and therefore expect their fees to be waived and compensation, otherwise you will be writing to the Financial Ombudsman as they havnt given you contact details on who you should contact in the event of a complaint.

Linz2012

Thank you! I shall get in touch with them on Monday - I told them many times im a FTB thats needs everything explained to me, Could they be taking advantage.

Also with my Solicitor fees - I have only been giving a quote (i'm using the estate agents) & not the full total but I've paid my non refundable £60 for them to instruct. I'm awaiting on the pack from them .

Am I meant to be given a total breakdown on what I shall be paying for eg Deposit, solicitor?

Another Question - Sorry. At what stage do I hand over my deposit?

kingstreet

You pay your deposit to your solicitor in readiness for exchange of contracts.

I'd expect any decent solicitor to provide you with an initial costing and an anticipated total of fees, disbursements and VAT. Decent solicitors also include the "completing SDLT return" and "acting for lender" in their headline fee and don't charge it separately to make their fee look cheaper than it really is...