Mortgage Broker con? More Expensive Arrangement & Valuation Fees!

Baker_1

I'm feeling ripped off by my mortgage advisor- can anyone offer any advice?

I am a first time buyer. I have had a survey/valuation on a property and am currently waiting for the formal offer to be processed by our lender. The mortgage product was recommended by an advisor who is affiliated to the estate agent. I already had what I thought was a decent grasp of mortgages but I wanted to be absolutely sure I got the best deal, so I went to see her, knowing that her services would cost me a fee of £95. I was prepared to pay this for peace of mind.

However I just found out that if I had applied directly to the lender myself the exact same mortgage product would have been £200 cheaper, and the valuation (for which I paid £150) would have been free. I am really annoyed, because I emailed the advisor at the time pointing out that the lenders website showed cheaper fees. She just said 'I have checked it out and the fee is [the higher price]." I trusted her and went along with it. Now I realise that I have wasted £350 and to top it off the advisors also want £95 in fees from me!

At no point was I informed that the lender’s own arrangement fees could be more expensive if the application was made through the advisor and I can't believe that having asked the question directly they did not tell me what was going on. I have challenged them but they insist "it was the best deal for you on that day". Well it may have been the cheapest deal on their system but it certainly wasn't the best available by at least £350.

Am I just being niave here or do I have some recourse? I haven't exchanged yet and I feel like telling them to stick it. If I apply all over again myself I can limit the damage to £250 and also save myself the advisors fees, which I really do not want to pay! But then I would run the risk of holding up the whole transaction, which in turn will cost me more in rent.

What do you think?

Rick62

Who is the lender?

HelpWhereIcan

Without knowing the lender and the deal you have been offered it would be difficult to say.

It may well be that the broker is one that has an arrangement with some lenders that they instruct the valuation themselves and they have been a bit cheeky charging you the fee.

It should be very rare that it actually costs you more in fees by using a beoker. You should have some recourse if they have incorrectly quoted the fees, but let us know more details and someone will be able to tell more.

AndrewSmith

I would imagine that the broker was part of a network of agencies such as Connells or Sequencehome, with whom it is the norm to charge the client an upfront valuation fee regardless of lender etc.

This is so that the broker can instruct the valuation immediately at point of sale which will then be pannelled out to the parent company of the firm for which he works. In the example I give above this would be Connells surveyors.

It's all about reciprocal business and keeping the parent company happy. Companies such as Connells do not solely have to sell houses to make money, they get the majority of income from Life Insurance referrals, Mortgages and Surveying work.

Baker_1

The deal is a 5.24% 2 year fixed rate with The Cheshire. I am paying £699 plus £150 valuation. If I had applied directly on the same day I could have had it for £499 all in (Cheshire have confirmed this) They told me they have different rates for direct/broker customers.

In my view the mortgage advisor did not so much mis-quote the fees as deliberately withhold information, despite my specifically asking her about it.

In terms of the valuation, I am fairly sure it was The Cheshire who instructed it because I sent them the £150 fee.