Mortgage rate fee

newmummy83

Hi,

Was after some help with a slightly odd situation:

We applied to F/D for a mortgage of £204,000 (90%) and paid £1500 at the time to secure a rate of 3.59% which they said at the time is non refundable unless they can no longer offer us the mortgage.

I am now pregnant and due to start SMP and my fiance has started a new job (2 months or so ago). We now only want to borrow £134,000 which takes our LTV down to 82%. This means we can get a better rate of 3.49% fee free with a free valuation from the same mortgage company.

They have said that the fee we paid is non refundable.
What they can do is see if they can still offer us the £204,000 based on our new circumstances and if they can't, they'd refund us the £1500. But if they do this, they have said we cannot apply for the lower amount either, it'd be a straight forward NO for at least 6 months.

I don't get this, as if they can no longer offer us the £204k but CAN offer us £134k based on our new circumstances, and the mortgage offer available on this is fee free why they can't just refund the fee and do a new application???

I almost felt like the lady on the phone was just saying it to convince me to accept the £1500 fee but still apply for the lower amount with them, which we have a good chance of getting!

Just wanted to check before I go ahead and do it.

The only other mortgage out there that's worth doing (based on savings over 2 years etc) is with West Brom Building Society but read loads of terrible reviews with them and can't be doing with the hassle with a baby due in 6 weeks!

Thanks for reading the essay!!

Regards,

Barbara.

newmummy83

I am guessing no one was able to offer any insight into this

kingstreet

Unfortunately, you have a very specific question about a lender which does not accept business from brokers, so those of us who post regularly on here can give little insight.

On the face of it, you paid the fee to secure the product and the product is still available. You now wish to change the product but do not satisfy the lender's criteria for refund of the fee, as your change is voluntary and not being forced on you by the lender's inability to lend.

This is one reason I never recommend products with up-front fee payments and always go for the "add to loan" option for my clients. I advise they repay them soon after completion and avoid paying any interest; the risk of a lost fee is too great during the application process.

newmummy83

Thank you very much for your reply, and explanation about brokers - I didn't realise this.

If they can no longer offer us the agreed £204k lending that we paid the fee for then I thought technically, the product is no longer available?

They have agreed to refund the fee if they cannot offer us £204k anymore (which is pretty likely based on our new circumstances)

But if this was the case and in a month's time we decided to buy something cheaper could we not go back to the same lender and apply under a new application for the £134k? That is what I am finding a little odd, that she's saying if they decline the £204k we cannot apply to them again for another 6 months for any amount... I have not heard of this before. Surely a lower amount is a different case?

Thanks again!

Barbara.

Thrugelmir

newmummy83 wrote: »

If they can no longer offer us the agreed £204k lending that we paid the fee for then I thought technically, the product is no longer available?

The change of circumstances is entirely yours not the lenders. So not the lenders issue to address. Had your circumstances not of changed from the original application. Then the offer is still open to you.