Annoyed at mortgage arrangement fees, is it a rip off?

Wig

danjberry wrote:

sorry but the point is they are not immoral, the fee is there for the bank to make a profit, no justification needed. why are being annoyed that banks make profits? people are quick to shout about how bank are screwing them over these days when they are just running an efficient company. you only have to watch dragons den to hear people come in making a 100% mark up on their product, only to have the wholesaler to put a 100% mark up on what they paid for it. that is all banks are doing

companies = profit

The point is I gave my opinion, you asked why I held my opinion, I told you, It is my opinion on the way the laws should be changed to make the mortgage industry simpler (as the poster above says). It is my belief that making things simpler (through legislation banning all fees or allowing the lenders to quote 1 upfront fee to encompass the whole term of the mortgage) would make the market much easier for consumers to see who is cheapest and would therefore encourage more competition between the lenders which would also benefit consumers.

We should be able to look at what the lenders are offering and easily compare like for like with other lenders. We shouldn't have to trawl through T&C small print to find out what they charge for this or that.

Indispensable_Hobbes

Any amendment to the product on which your mortgage is run is a mortgage review whether you actually discuss it in great detail or decide on another product straight away.

All fees are listed in the tariff of mortgage charges leaflet for NR.

Also you're just thinking of these as upfront fees. If you match them against how much you will save over the term of the mortgage I imagine it would put it into perspective.

Like the one off insurance fee is for administration involved in making sure the property is adequately insured over the term, £25 over a 25year term is £1 a year.

MortgageMamma

Wig wrote:

The point is that if the fee cannot be justified it is immoral and should be banned.

Is this some sort of new cult religion or something? Thou shalt not profit from your business endeavours. Money makes the world go round. Thats life - accept it. If the charging structure is too complicated to understand take professional advice, there are plenty of mortgage professionals who do not charge a fee but make commission from lenders, or is that immoral as well?

Wig

DoshSaver wrote:

Now that is fair and cost effective because there are no extortionate fees for joining, leaving or intermediaries with INCLUSIVE benefits i.e. overpaying, holidays etc that many customers want.

Exactly why I took a mortgage with Direct Line in 1996 No fees, clear and simple, no penalties, just one Std Var rate that applied to everyone. And it was a low rate.

I paid off my loan at 3x amount per month. Something I noticed over the years was that they used all the BOE rate changes to slowly increase their profits, i.e. base rate went down by .25% Direct line went down by 0.18%, base rate went up by 0.25% DL went up by 0.3%. It annoyed me at the time but as I was amost near to completion I couldn't be bothered to change with all the hassle that entailed.

Now I see Direct line has joined in with all the others charging huge fees, offering lots of different types of mortgages etc etc all designed to make comparison between lenders more dificult.

Wig

MortgageMamma wrote:

Is this some sort of new cult religion or something? Thou shalt not profit from your business endeavours. Money makes the world go round. Thats life - accept it. If the charging structure is too complicated to understand take professional advice, there are plenty of mortgage professionals who do not charge a fee but make commission from lenders, or is that immoral as well?

Please see #22

MortgageMamma

Wig wrote:

The point is I gave my opinion, you asked why I held my opinion, I told you, It is my opinion on the way the laws should be changed to make the mortgage industry simpler (as the poster above says). It is my belief that making things simpler (through legislation banning all fees or allowing the lenders to quote 1 upfront fee to encompass the whole term of the mortgage) would make the market much easier for consumers to see who is cheapest and would therefore encourage more competition between the lenders which would also benefit consumers.

We should be able to look at what the lenders are offering and easily compare like for like with other lenders. We shouldn't have to trawl through T&C small print to find out what they charge for this or that.

This is the whole point of using a broker!

Rick62

The idea of the industry being regulated even further is terrifying, all it would lead to is less choice and more expensive products. The market is very competitive and that keeps the cost down.

Some lenders provide free valations and/or free legal fees (particularly on remortgages) are you also suggesting that it is unfair that they don't charge for these things?

A mortgage is one of the biggest purchasing decisions in a persons life. All offers are now in an FSA determined format so everyone should read that properly and should speak to a mortgage adviser.

Wig

IMO we shouldn't have the need of brokers, the market should be clear and simple to consumers (through legislation - because they are not managing to do it voluntarily). This would then encourage lenders to be more competitive.

Mr_helpful

I have to say there is alot of waffle on this thread about fees. Charging a fee is a safe bet for the lenders but its not so easy to compare one scheme with another as most often fees are added to the loan. its easy to compare over the fixed or discounted period but the fee is still on the loan so you could be paying it for 20 yrs or more. The FSA regulates the sale but I believe it should also regulate the product to an extent so that things are on a more level playing field and one can more easily see what is best for the client

MortgageMamma

Lenders are competitive enough and without brokers people with complex mortgage requirements would be stuffed

90% of my clients come back and say thank god we met you, we could never have done this without you. Where there is demand someone will always supply it. There will always be a demand for good brokers. products won't simplify - thats like saying we should go back to dealing in cash for everything, lets get real. it ain't gonna happen. The reason products are complicated is because peoples requirements now are not as straightfoward as they used to be