Mortgage brokers fees

jimbob8

Hi, I'd like to know if anyone else on here has had any dealings with LWF Mortgages and if so, did they find the fees acceptable or were you even told about the fees?

A couple of months ago, I knew my fixed term on my mortgage was coming to an end and the interest rates were starting to creep up so I tentatively looked into remortgaging on moneysupermarket... only to have all of my details passed on to LWF who called me on numerous occasions to arrange an (no obligation) appointment... during the first meeting the rep went through my details, my previous morgage agreement, my credit details and found out what type of mortgage and terms i was looking for... I'd been through all this before when i first bought my house with a adifferent advisor, so had no problem with this. The one thing not mentioned though, was how they were paid for their services... on arrangement of my first mortgage i was told that the advisor would be getting paid by the lender as commission and I assumed the same this time around.

I am now only days away from completing my new agreement and absolutely skint (2 weeks away from payday as well) as Ive had a tough month financially, and i have received 2 letters in 2 days regarding fees, one from a conveyancing solicitor who LWF have appointed, who want £295... including £25 which they will pay to LWF for my custom??? very puzzling!

The second letter from LWF themselves which seems to say "oh by the way, our fees for this are £1200" which will be added on to my morgage... I can swear blind that i havent been told about this fee but im guessing somewhere in the small print of the mountain of paperwork i had to sign it will say it somehwere... any advice?

Dave_Ham

The document you are looking for is the Key Facts Illustration (KFI) for the new mortgage.

If you have paid nothing so far, you can still back out of the deal.

Typically a remortgage would be fee free in terms of legals, you may be getting cashback to use their solicitor but again this will be in the KFI.

First step with anything though, is to call the advisor and ask the questions you want answers to.

kingstreet

You should have received an Initial Disclosure Document explaining how they operate, their service and their remuneration at the outset of any contact with them.

You should then have received a key facts illustration which shows, in section 8, any fees payable in connection with the mortgage.

Then, the mortgage offer should have confirmed the details in section 8 of the KFI.

Next, you should have been asked to sign a fee agreement form confirming the amount payable and the timing involved.

Finally, if the service you received was "advice & recommendation" you should have been give a suitability letter confirming why the mortgage product recommended best suited your needs and circumstances in comparison with the other options open to you.

Which do you actually have?

jimbob8

Thanks Dave, I have so far paid an arrangement fee to the lender and been told by the solicitor in the fee request letter that if I was to back out they would still charge me for the work completed, likely to be £75 + VAT

castle96

answer Kingstreets Qs. This will enable an answer from him. A solicitor will not proceed with any work unless you have signed an authorisation. Why would they.

You have documentation. You have/have not signed paperwork.

Noone can answer your Q without the full facts

jimbob8

I can't check most of the paperwork at the moment as I'm at work and don't have it with me. As soon as I can find out I'll fill in the blanks

jimbob8

Kingstreet: I was told about how they operate and the options they had available to them but I don't ever remember being told about their remuneration, as I say I assumed it would be by commission from the bank as my previous mortgage (naive I know)

I have had someone check the kfi and it does state the fees in there, again in my naivety i assumed that this would have been explained verbally.

The actual mortgage offer has not been issued yet, only text confirmation that the offer is imminent, but I'd guess that will have the relevant kfi since the rest has been correct so far. Same goes for the fee agreement... Although I know I would have remembered that sort of figure quoted.

I don't remember a suitability letter either but again I'm guessing there is one. I have a feeling that everything is in order and above board but, I just feel because it wasn't spoken of I have been a bit daft. It just all feels a bit underhand... Eg if the £1200 had been quoted to me in the first place I would have questioned it, but it's only now with the agreement in the post that I'm being 'reminded' of it.

Feel a bit of a mug

Dave_Ham

If yours is a straightforward remortgage with no adverse or difficulties in there, with a highstreet lender then feel free to pull out.

The fee excluding the above, is a bit steep.

You can still pull out and arrange your own mortgage, or utilise a more affordable broker...

Your call and probably a harsh lesson learnt.

Not just at your door though, I personally am always totally transparent about fees to avoid this situation..

kingstreet

I routinely go through each section of the IDD and KFI verbally and ask the borrower to sign a copy to say they've received it.

It is not safe to assume every adviser works this way. There are some firms who try to play down documents and don't fully explain them because, frankly, there is no way to justify some of the charges you see.

If the adviser doesn't go through each document with you, YOU have to make sure you read each one, in full, immediately they leave and raise any queries with them as soon as possible.

All I can suggest is you talk to more than one adviser when considering a mortgage transaction and ensure you get copies of all the documentation;-

Initial disclosure document
Factfind
Key facts illustration
Mortgage application
Suitability letter
Fee agreement

so you can refer to documents in your future dealings with the adviser/firm.

I know this is a bit "after the horse has bolted" but others reading this may benefit in future.

jimbob8

Well to be honest, Im so strapped for cash at the minute that i dont have time to arrange another mortgage. I think im just going to have to take this one on the chin, but thanks for all your help and advice with this and yes hopefully someone else will benefit from my mistakes!

GMS

If you haven't signed a fee agreement then negotiate.

If you are not happy with the service and or fees go back to the broker.

They should have explained clearly what was due and when.