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

Mr_helpful

The big problem I have with fees is that with lenders charging in some cases 2.5 percent and above some fees I quote are in excess of £10000 which is ok but if I add £10000 of credit card debt to a loan then i have to write war and peace justifying it for the FSA.

millsy1980

MortgageMamma wrote:

You know, it makes me laugh all this "i despise fee's" business

Money is what makes the world go round. People expect everything for nothing these days. I know the charging structure on mortgages can be complicated, but thats what mortgage brokers are for. If people continue to go to banks and building societies direct for their mortgages, then I have no sympathy if they are charged a large uncompetitive fee.

I have read a number of your posts MortgageMamma and find them very informative and as an advisor pick up bits of information that I may not have been aware of.

However, I work for a Building Society that offer deals that charge arrangement fees and ones that don't. Every customer of mine goes through the same process whereby they are shown calculations for both scenarios to indicate whether paying the fee or not paying the fee would be more beneficial for them. As far as I am concerned I offer fair advice and customers are not under any pressure to take any advice I offer. Brokers are not the bee all and end all so please don't make out that coming to us direct could lead to customers being charged a large uncompetitive fee because this could happen with a broker as well.

danjberry

Wig wrote:

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.

but every lenders criteria is different, you cannot think people will have to talk to a lender stating their details to see if they match the criteria, what if they dont, are they going to have to talk to every lender to see. at least with a broker they willl have a good idea of each lenders criteria and if they are declined by one they will know who is more likely to accept them.

danjberry

millsy1980 wrote:

However, I work for a Building Society that offer deals that charge arrangement fees and ones that don't. Every customer of mine goes through the same process whereby they are shown calculations for both scenarios to indicate whether paying the fee or not paying the fee would be more beneficial for them. As far as I am concerned I offer fair advice and customers are not under any pressure to take any advice I offer. Brokers are not the bee all and end all so please don't make out that coming to us direct could lead to customers being charged a large uncompetitive fee because this could happen with a broker as well.

i dont think she has said this at all. But basically you presumably only offer your companies products? a broker, whole of market, will be able to give fair advice based on the whole of marker and not just one building society. As i have said in my previous post do you expect customer to talk to every lender to see if that lenders products is the best for them. no a broker can do that for you a lot quicker.

Mr_helpful

just to put a further spanner in the works If the broker chages you a fee by percentage the effect of his fee may be such that you no longer get a better deal than going direct to the high st. As a broker I would suggest a non fee charging independent broker is the best for the clients but then im biased.

AndyWallace

millsy1980 wrote:

As far as I am concerned I offer fair advice and customers are not under any pressure to take any advice I offer. Brokers are not the bee all and end all so please don't make out that coming to us direct could lead to customers being charged a large uncompetitive fee because this could happen with a broker as well.

Indeed, the banks are just as culpable for their advice and with CeMap or equivalent are just as qualified as any broker. The only difference to the consumer is product choice but then many clients who see a broker will pay a fee.

Andy.

AndyWallace

Mr_helpful wrote:

As a broker I would suggest a non fee charging independent broker is the best for the clients but then im biased.

As a broker I would suggest a fixed fee charging directly authorised whole of market broker.

Andy.

AndyWallace

Wig wrote:

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.

No point having solicitors then if legislation is so simple.

Andy.

millsy1980

danjberry wrote:

i dont think she has said this at all. But basically you presumably only offer your companies products? a broker, whole of market, will be able to give fair advice based on the whole of marker and not just one building society. As i have said in my previous post do you expect customer to talk to every lender to see if that lenders products is the best for them. no a broker can do that for you a lot quicker.

That is fair enough, but I was also under the impression that lenders don't always offer their full range to the intermediary market, therefore seeing what is availabe via lenders direct is not necessarily a bad thing either.

dunstonh

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.

Lenders use brokers and generally offer better deals through brokers as that is the cheaper option. The branch option is far more expensive as it requires more overheads and carries a liability to comply with existing legislation.