non-refundable application fee YBS

wacko911

First time buyer so bit of a n00b question.

Looking at offset YBS mortgage:

A mortgage application processing fee of £130 is payable on all mortgage applications. This fee is payable on application and is strictly non-refundable. This fee is charged to cover the costs involved with processing a mortgage application

Where a product fee is charged, part of it is payable with your application and is strictly non-refundable. Payment of this fee at this stage does not commit us to issuing you a mortgage offer. We cannot deal with an application until we receive your completed application form and fee (if applicable).

Does this really mean that if I apply and they decide not to offer me the mortgage for whatever reason, im out £130 for basically filling in the appliction form? Sounds like a total scam, they could just reject people all day long and keep the £130 fee?

Hopefully I'm missing something really obvious.

opinions4u

It's a reasonable estimate of the true cost of assessing an application.

You'll find they are lending, so there's no 100% decline policy in place.

Sounds like a total scam

Use somebody else then. Or if you do use YBS then make sure you have a clean credit record, you're on the voters roll, you have a stable employment history and no excessive debts before you apply.

If you do a few hours work for your employer that turns out to be wasted time I assume you get paid regardless.

Thrugelmir

wacko911 wrote: »

Does this really mean that if I apply and they decide not to offer me the mortgage for whatever reason, im out £130 for basically filling in the appliction form? Sounds like a total scam, they could just reject people all day long and keep the £130 fee?

There's no scam. If you don't like the terms of the offer look elsewhere.

_Andy_

It's not a 'scam' at all.

Annisele

If you're serious about your application, then in some ways a charging scheme like that is in your interests.

Assessing applications costs money, whoever pays for it. If the lender only charges successful applicants, then those people are effectively subsidising the rejected applicants. If all applicants pay their own bit of the costs, you'd expect the lender's fees to be (slightly) lower than they otherwise would be.

kingstreet

Get an agreement in principle first - free.

At least you then know your case isn't going to get tipped on the day it arrives!

dunstonh

Sounds like a total scam,

How is employing someone to do work and telling you that the first stage will cost £130 a scam?

they could just reject people all day long and keep the £130 fee?

And lose all the money they make on the mortgage? That would be very short sighted.

wacko911

Thanks for the replies. It's just a shock they can charge this, I mean if I went to open a credit card and they said it's £130 to apply and we might not offer you one, or a loan, bank account etc. I would run a mile!

There are scam loan brokers out there I read about everyday that tell people in debt we can get you a loan just pay us a finders fee, when in fact they dont have a lender lined up. While it's highly unlikly that YBS are at this sort of thing, imagine they have allocated all thier funds, they can just keep milking all the applicants for the £130 for basically little or no work. I still think it's an unfair condition but that's just my humble opinion.

How do you get the mortgage in principle free first? It says you have to pay the fee when you apply. Sorry again, this is my first mortgage and they do have lower fees that than most of the lenders I have looked at so maybe this is why.

kingstreet

Try this;-

http://www.ybs.co.uk/mortgages/apply.html

dunstonh

Thanks for the replies. It's just a shock they can charge this, I mean if I went to open a credit card and they said it's £130 to apply and we might not offer you one, or a loan, bank account etc. I would run a mile!

Yet that is actually on the cards in future. The regulator and Government prefer explicit charging.

amnblog

If you are worried about a £130 risk you need to think carefully if buying is right for you.

YBS will charge you £325 for a sensible valuation on a typical first time buyer property and if the property does not meet their needs you have 'done your money'.

Your solicitor will charge you a few hundred pounds to start the legal process and if the buyer pulls out you are out of pocket again.

Also HMRC have a little 'scam' called stamp duty land tax which is 1% of any purchase price between £125,001 and £250,000.