Mortgage Application Costs

stripeytrousers

My partner and I have had a offer accepted on a house last week. We've been given the following breakdown of costs which are payable to Nationwide.

Booking fee - £99 (on application)

Arrangement fee - £400

Valuation fee - £290 (on application)

Telegraphic transfer fee £25

OTHER FEES

Fees to Connells for arranging the mortgage - £349 (on application)

Broker valuation admin fee - £165 (on application to broker)

We are first time buyers and just want to get some opinions on the above mentioned costs. Are these fees the norm in setting up a mortgage?

Thanks.

kingstreet

These are the fees you'd pay for a Nationwide mortgage;-

Booking fee - £99 (on application)

Arrangement fee - £400

Valuation fee - £290 (on application)

Telegraphic transfer fee £25

These are the fees you're paying for using Connells;-

Fees to Connells for arranging the mortgage - £349 (on application)

Broker valuation admin fee - £165 (on application to broker)

I assume Connells are receiving commission from Nationwide too? In which case they are getting over £850 for arranging a £100k mortgage. If you feel that properly rewards them for the work they are doing, it's perfectly acceptable.

There are plenty of brokers out there who don't charge a fee and who would be happy with the lender commission and there are independents who would charge you a fee of about what Connells are charging but would refund the commission to you, reducing your broker cost to around £200.

There are several different ways your broker can be paid. It's up to you to decide who you want to act for you and what you want them to be paid.

DannyboyMidlands

So you are paying £514 to Connells for what? A search and then filling in a form for you? Why not go direct to Nationwide (or whoever)?

stripeytrousers

Hi Kingstreet,

Thank you very much for your quick response, you're answer is really helpful.

The only reason we looked at Connells is because thats who the house is being sold through and they said they could ensure the house was taken off the market and if we went with another company, the sellers could choose someone else.

How would I find a broker who doesn't charge a fee? Would this be non-high street?

kingstreet

Ask for the recommendation of friends or relatives, or look here;-

https://www.unbiased.co.uk

Switch off the "website only" option to get a full picture in your area. Non high street? No. Same lender, same deal.

As DM says, even think about going direct. Estate agents use all these little tricks to get you to use them and most of them are untrue, or perhaps even downright dishonest tricks. If you can get a mortgage with Nationwide, you probably don't need a broker. If Connells kick off, go see the vendor and tell them what's going on. Most would be rather upset with their agent putting their profit motive before the vendor's welfare...

Worth bearing in mind Connells will only have told you about products they get paid for arranging. Nationwide may have better direct products and you won't have been told about HSBC's trackers or Yorkshire BS's fixed rates.

stripeytrousers

Thanks everyone, will also look in to going to Nationwide direct.

I spoke with a mortgage advisor previous to Connells who i was really happy with and found her very helpful, she only charges £299 and no admin fee, so i've called and booked in with her tomorrow to discuss things. Now just to break the news to Connells, i can't imagine they're going to be very happy ... anyone fancy doing it for me? :-)

DannyboyMidlands

If your situation is pretty straightforward I'd use a website like www.moneyadviceservice.org.uk to find the deal you want and then contact the lender direct. Depending on the size of your deposit and the type of product that you want, HSBC and 1st Direct have some cracking tracker deals.

stripeytrousers

I just rang up Connells and they said that if we don't use them, if other people show a interest in the house, even though it says 'Sold - Subject to Contract', that they can book appointments and put offers in until we sign the contract. But if we use them he can 100% guarantee that no one will view the house.

Is this true? I feel like we're being blackmailed in to using them.

kingstreet

You are being blackmailed. What they are saying is "we want another £850+ to sell this house to you."

In practice, if someone else comes along and makes an offer, they can't guarantee the vendor won't accept it anyway. They HAVE to put ALL offers to the vendor. Then you'd have your Connells mortgage and no house either way.

It's your call, but I'd say "no thank you" and do what you want. I would think of reporting it to the vendor as I mentioned.

thebrow2000

stripeytrousers wrote: »

I just rang up Connells and they said that if we don't use them, if other people show a interest in the house, even though it says 'Sold - Subject to Contract', that they can book appointments and put offers in until we sign the contract. But if we use them he can 100% guarantee that no one will view the house.

Is this true? I feel like we're being blackmailed in to using them.

How did you get on with this?

I paid the fee as a sweetener and then I was outbid. I originally told Connells I would only pay this silly fee if i got the house for my original offer, if i lost out they would repay the fee. Now when i asked for my money back, they said if i put a higher offer in I would not get the £349 back. Not impressed

betmunch

Classic Connells play in both cases, I hope you report the to Trading Standards, its the only way to stop this kind of behaviour.