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

danjberry

millsy1980 wrote:

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.

true but also more likely to be the other way round with products only available to brokers due to the reaosns dunstoh has stated.

MarkyMarkD

fimonkey wrote:

My personal bug bear with fees is that it makes it so complicated for ppl who struggle with numbers (myself for one). I would like one figure, and that is how much I repay each month, without having to calculate whether it's best to pay a bigger fee and have lower interest rates but then have to pay a huge fee once again if I want to switch at the end of a certain period, yadda yadda yadda.

In my experience, simple is always better, I would welcome a move to make all mortgages SIMPLE! (As is the case if i want a standard unsecured loan, I ask for an amount to borrow, I'm given an APR and I say yes or no), .. no fees at the beginning, no fees at the end. If it means higher APR then so be it, but please banks and lenders, .... simple and upfront!!! (not hiding extra fees etc behind adverts for the best rates ever).

Fimonkey, it's really not that hard.

If you have to compare things in terms of monthly payments (and it's not the best way) then simply add on the fees to the amount you are borrowing and voila - a fair comparison.

In other words, if you want to borrow £100k but the fees are £1,000, just get the quote based on £101,000 as that's the total amount your repayments are going to be based on.

Alternatively, divide the fees by the incentive term and the amount of the loan:

£100k @ 5% fixed for 2 years + £1,000 fee equates to 5% + £1,000/£100k / 2 i.e. 5.50%.

MarkyMarkD

DoshSaver wrote:

Yes that is what I meant they must be artificially low; however, if they do up their rates, as they are entitled and as they make clear in the plain/clear advertised product information, it would mean the rate would be 6.15APR (guaranteed max of 0.9% over bank base rate), with absolutely no catches, hidden or otherwise!

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.

6.15% is an absolutely rubbish lifetime tracker rate, so I can't understand anyone thinking that it's great to be offered such a fair rate. You can pay FAR less than 6% to other lenders, also with virtually no fees.

The current rate is a loss-making one which isn't sustainable - it is no different to savings accounts which offer a short-term bonus and anyone who believes that ING will maintain the current margin to BBR for very long is sadly deluded. ING are blatantly doing with mortgages exactly what they did with savings accounts - come in with a competitive rate, hook lots of customers, and then make their rates steadily less attractive hoping that most of the customers will stick with them.

AndyWallace

MarkyMarkD wrote:

Fimonkey, it's really not that hard.........

..........Alternatively, divide the fees by the incentive term and the amount of the loan:

£100k @ 5% fixed for 2 years + £1,000 fee equates to 5% + £1,000/£100k / 2 i.e. 5.50%.

LMFAO

:rotfl: :rotfl: :rotfl:

Rick62

danjberry wrote:

true but also more likely to be the other way round with products only available to brokers due to the reaosns dunstoh has stated.

Of the 8 mortgages that I've completed so far this year for clients 7 have been exclusive to brokers that the customer would not have been offered directly from the (highstreet) lender. The 8th one had flexible features that the client wanted but would not have been aware were available without my advice.

So use a broker, get exclusive deals, professional advice and save a load of time. So long as you can find a professional broker who is fees free or a reasonable fixed fee. BTW, brokers are all regulated by legistation, its managed by the FSA and FOS as well as DPA and OFT.

MarkyMarkD

Er, what's wrong with you, Andy?

Wig

AndyWallace wrote:

No point having solicitors then if legislation is so simple.

Andy.

Your point makes no sense. either that or you failed to understand what I was saying.

AndyWallace

MarkyMarkD wrote:

Er, what's wrong with you, Andy?

Perhaps my strange sense of humour. Still smiling now thinking how the poster said he wasn't great with numbers.

No offence intended, please excuse my pelling its hard when you got tears in your eyes.

Andy.

Wig

danjberry wrote:

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.

I'm not sure what you have taken from my post, but it was in reply to MM, who basically said "mortgages are complicated that's why we have brokers to sort it out."
I replied basically saying that's my point they should not be so complicated, they should be forced to be simple or less complicated, then brokers would not be needed.

Of course if there are still some consumers too lazy to shop around for themselves then some brokers will still be in business.

MarkyMarkD

If anyone's maths is so limited that they can't divide a few numbers by each other, they certainly shouldn't think they can get the best mortgage by approaching one mortgage lender in the high street and buying what they are offered.

I fundamentally disagree with DoshSaver and Wig who seem to believe every financial product should be dumbed down so that people with one GCSE in Woodwork can understand them. Mortgages are inherently high value transactions to most customers and people shouldn't rely on the products being made "one size fits all" rather than getting the advice they so clearly need - in most cases at no cost to themselves.