Unfair Booking fee from Coventry

mabelcat99

Hi Folks, This is my first post on any type of forum so I hope you can understand it all ok! Just looking for opinions really. We have recently looked at changing our mortgage deal as fixed rate had come to an end. Our financial adviser recommended a Coventry deal as it suited our circumstances (no tie in). We were charged a £199 booking fee which we were well aware of and knew it was non refundable should WE not take up the mortgage. However, and this is my question... coventry refused to lend to us but have kept the booking fee - is that fair?? I fully understand why they would keep a fee if we turned them down, but to us it sounds like we have been charged £199 to be told we are unacceptable clients! We were quite happy to go with them and our mortgage adviser really tried to get them to accept us but they refused.Can we challenge this do you think? Opinions welcomed and thank you for your time.

Meant to add.....the other point which I think is unfair is that they processed our booking fee before they had any information about us or our financial circumstances? What is stopping them simply charging this fee then turning every application down? An easy way to make £200.....

GMS

Your adviser should have checked against lending criteria prior to any application as the fee is non refundable.

What was the reason for the decline?

ACG

Thats the risk you take with booking fees. We have a bit of a thing in our office that the Coventry probably earn more from booking fees than they do from mortgage lending.
Putting that to one side though, why did they decline your application? This will help to decide whether it was unfair or not and whether you can get your money back from the lender or broker.

They have technically done the underwriting on your application so its not like your money has gone nowhere.

Thrugelmir

mabelcat99 wrote: »

What is stopping them simply charging this fee then turning every application down? An easy way to make £200.....

Of the £200. £34 is VAT that will be paid to Treasury. So net cost is £166.

Costs money to run offices , pay staff, pay for credit checks to be performed by Experian etc.

So not easy money.

mabelcat99

ACG wrote: »

Thats the risk you take with booking fees. We have a bit of a thing in our office that the Coventry probably earn more from booking fees than they do from mortgage lending.
Putting that to one side though, why did they decline your application? This will help to decide whether it was unfair or not and whether you can get your money back from the lender or broker.

They have technically done the underwriting on your application so its not like your money has gone nowhere.

Hi, Thanks for your comments everyone, they wouldn't lend us the full amount for the remortgage - we weren't borrowing anymore money,but our outstanding mortgage was 176,000 and our house was valued at £300,000 so we thought we were an ok bet? There main reason for refusal I think was they wouldn't take our childcare costs into account? My husband and I both take part in a salary sacrifice scheme and each have £243 of our salaries each month paid as childcare vouchers. As far as I know their reason was that our income wasn't high enough to allow them to lend us the 176,00

ACG

If its down to affordability, then i would think you can ask your broker for your fee back.
He/She should be checking this before spending your money.

Anything other than a wage i check everytime, even if i know the answer as you never know when lenders change their criteria.

Thrugelmir

mabelcat99 wrote: »

Hi, Thanks for your comments everyone, they wouldn't lend us the full amount for the remortgage - we weren't borrowing anymore money,but our outstanding mortgage was 176,000 and our house was valued at £300,000 so we thought we were an ok bet? There main reason for refusal I think was they wouldn't take our childcare costs into account? My husband and I both take part in a salary sacrifice scheme and each have £243 of our salaries each month paid as childcare vouchers. As far as I know their reason was that our income wasn't high enough to allow them to lend us the 176,00

What's your household income?

mabelcat99

Hi, Luckily we didn't pay our broker a fee - he was very apologetic about recommending them, said upfront they were 'tight' on their lending criteria but even he was surprised. We have a good history, never defaulted, over pay regularly, have no loans, pay credit card off monthly etc but I guess we just didn't suit them In the end we went back to our current lender who offered us a deal which was only £15 a month more expensive - maybe should have just gone with them initially but live and learn....thanks for your comments

holly_hobby

What ACG is saying (I think), is that the broker should have sounded out how Coventry would assess the elment of your salary paid in CC Vouchers, before submission - given thats its not typical renumeration and their reputation.

If he knew about the CC vouchers pre submission , and failed to verify with them that you would still meet affordbility, I perhaps would argue (if coventry refuse to budge) that its he whom owes you the refunded BF - given the responsibilities of his role in this.

If however, you didn't disclose to your broker that part of your salary was recd in CC vouchers, then I do think that you've lost your booking fee ( which actually relates to reservation of funds under the product chosen as oppossed to an admin fee which you would have stood more change of having refunded).

Hope this helps

Holly

ACG

Your broker should be checking you meet Coventrys affordability model.

Not all lenders accept all forms of income, your broker should be checking this and if they dont accept certain parts of your income he/she should be checking you meet the affordability without those parts of income.

(just following on from Hollys post).

holly_hobby

The data below is lifted from Coventry's own intermediary site ...

Which does rather put the ball pretty squarely back in your brokers court (given he stated before he submitted they were tight on affordability) and confirms what I and the rest of the guys have already stated .... (TBH to have submitted without even a DIP given the circs, does appear that hes a little inexperienced, or may just have been lax instead)

"Check lending policy

Make sure your case meets our lending policy before you submit your application, as we will not refund fees where we subsequently decline or cancel a case.

Please be aware that we may request additional information to finalise our lending decision "