Reclaiming broker fees on rejected mortgage application

caseh

New to the forums so hope this is in the right place.

I've basically had an offer accepted on a home and used a broker to obtain my mortgage from a lender. My income is way over what is required for this mortgage, and at the advice of my broker I've submitted my application pretty much assured it would be accepted.

However, it has been rejected for no clear reason with the exception that the application will be accepted if I put down 15% instead of the 10%. This isn't feasible, I accept the fact if I back out of this I lose my application fee however should I also lose the valuation fee I paid considering I've been charged for a valuation on a home where the deposit has now increased and no loan has been secured?

To top it off, my broker is £549 better off. Would this come under the consumer credit act as theoretically they are taking a fee without me receiving a loan via the lender they recommended.

Any help or pointers would be greatly appreciated.

Paully232000

From personal experience with mortgage brokers, well the one I used, charged £299 and on the contract stated that if did not get through the mortgage process after submitted all documentation, refund was £200. This was written into the contract, what did yours say re fee refunds?

ACG

This is why i always ask the valuation is carried out AFTER the underwriting.

With regards to your broker fee, what does the fee agreement say? Personally i only charge fees on offer of a mortgage, some brokers charge on completion and some on application.

If it is charge on application is there a refunds policy? If so, what is it?

Your contract is basically this agreement.

Depending on when the application was made you would have also either received an IDD or a Terms of business - the fees and refund policy should have been disclosed in this.

caseh

Didn't even think of checking IDD and come to worst result upon looking it over again. Fee upon application, no refunds. Schoolboy error learned the hard way I guess, thanks for the quick responses.

ACG

You have paid them, as much as you are annoyed and probably dont want to look at them again - get them to sort out a mortgage for you.

You may as well make the most of the money you have paid.

dunstonh

To top it off, my broker is £549 better off. Would this come under the consumer credit act as theoretically they are taking a fee without me receiving a loan via the lender they recommended.

They have done some work for you and are entitled to be paid even on failed applications. The regulator have no issue with that whatsoever. However, their fee agreement should state the amount that applies on failed applications and yours does.

However, just because this provider has failed, it does not mean they will charge you again to find another provider. So, continue to use them.

Let_Us_See

caseh wrote: »

However, it has been rejected for no clear reason.

I can assure you there will be a clear reason for rejecting your initial application. In other words your risk profile dictates the lender is unwilling to proceed with a 10% deposit, but will accept a 15% deposit. There is always a "reason why!"

Mortgage_Mark_2

Who is the lender? It seems a bit odd that either the broker didn't submit a decision in principle first, which would have come back with the alternative lending proposal that you mentioned, or worse still it passed the DIP at the proposed LTV, and then something came back in the full credit score that the lender didn't like?

It could be a change to your credit profile between DIP and application, something your broker would have no knowledge or control over?