Help please! Mortgage fees added to loan

confuzzald

Hi everyone, im new to this forum so please excuse any old ground covered etc etc. Ive had a quick look to see if my questions have been answered elsewhere but dont think they have.

With attention seeming to be turning from PPI to missold mortgages I have had a look at my original mortgage offer and am hoping that I can have the below questions answered.

Before I potentially get a backlash from mortgage brokers etc re charging fees for services is part of life I would just like to confirm that I am not trying to jump on the band wagon but am reacting to information within the media to see if it applies to my situation.

1. What is considered to be a fair fee for arranging/advising on a mortgage? I was charged £895 as an arrangement fee. £850 for the giving of advice, which in my opinion seems to be the same thing?!

2. A redemption fee of £125 'for administration or redemption at end of term/when mortgage is repaid fully' has been added to the loan. Should this have been added at the start??? Based on the info in the schedule this means that the fee (based on 9.8% APR over 25 years) is approx £313.75. Surely this should only be payable at the end and without being added to loan?!

My mortgage was arranged in 2006.

Thanks

holly_hobby

confuzzald wrote: »

1. What is considered to be a fair fee for arranging/advising on a mortgage? I was charged £895 as an arrangement fee. £850 for the giving of advice, which in my opinion seems to be the same thing?!

No they aren't - an arrangement fee is charged by and paid to the lender (in the old days this used to be a reservation fee), the £850 is for the services of the broker, in both sourcing and placing your case (using his market and professional knowledge), and the benefit of their support throughout the application process and beyond - which lets face it is why you chose to use a broker.

confuzzald wrote: »

2. A redemption fee of £125 'for administration or redemption at end of term/when mortgage is repaid fully' has been added to the loan. Should this have been added at the start??? Based on the info in the schedule this means that the fee (based on 9.8% APR over 25 years) is approx £313.75. Surely this should only be payable at the end and without being added to loan?!

My mortgage was arranged in 2006.

Thanks

If this is correct, the fee should only be charged when the charging trigger occurs i.e you are redeeming the mge. Of which it is usually included in the final redemption quote given to the conveyencer.

If it has been added to the loan upfront - without discussion or option to pay on a standalone basis, I would write to them, and ask for clarification of the fee, and why it has been added at inception (incurring interest charges) for an event yet to occur.

Now obviously at some point you WILL redeem the mge - the issue here is that the application of the fee is only appropriate at that time - if indeed it has been front loaded.

To be honest, I think you may and have probably mis-interpreted the T&Cs - and that what it actually says is that on redemption, a fee of £125 will be added to the total redemption figure. This sealing fee, doc fee, admin fee, MEAF, or whatever they choose to call it, is common right across the board with all mge lenders, and has always been the case - so the application of one to your account does not make it mis-sold, dodgy or whatever route you are looking at, in lodging a compensation claim (which is NOT advised or appropriate due to the above).

If the fee was added at outset/completion, your loan amount as detailed in your mge docs, completion statement and opening figs in your 1st yr mge statement, would clearly have been for £125 more than you applied for/was agreed or reqd - simple maths. IF that is the case, I believe there may be some merit in asking for an explanation from the lender re the front loading of an exit fee.

Hope this helps

Holly

dunstonh

1. What is considered to be a fair fee for arranging/advising on a mortgage? I was charged £895 as an arrangement fee. £850 for the giving of advice, which in my opinion seems to be the same thing?!

There is no such thing as a fair fee. It is what you are willing to pay. £895 seems pretty good for an independent but not so much for a whole of market.

2. A redemption fee of £125 'for administration or redemption at end of term/when mortgage is repaid fully' has been added to the loan. Should this have been added at the start??? Based on the info in the schedule this means that the fee (based on 9.8% APR over 25 years) is approx £313.75. Surely this should only be payable at the end and without being added to loan?!

Has it actually been added on to the debt or is it just appearing on the statement as info. Many statements now show the redemption amounts including charges. It doesnt mean that they have actually been charged though.

With attention seeming to be turning from PPI to missold mortgages I have had a look at my original mortgage offer and am hoping that I can have the below questions answered.

It is actually quite hard to be mis-sold a mortgage. There isnt really any attention being turned towards mortgage mis-selling. Sure, there have been issues highlighted and some areas tightened up but the problem is that for most people where rules have been broken, the borrower has also committed mortgage fraud. If you raise a complaint and you know you have not given correct income levels for example then you could find yourself on the fraud register and that is far more damaging to you long term.

At the moment, it seems a few scam claims companies trying to generate complaints where no complaint actually exists in the hope they get lucky. Some of the reasons they give (such as broker fees or adding fees to mortgage) are completely bogus.

confuzzald

Hi guys, thank you for your replies.