Help - Arrangement fee

daryl_1875

Hi all,


I was wondering if someone could tell me if this is correct please.
My mom and dad were going through the process of buying a house and were due to complete this week.
Unfortunately my granddad died the weekend though and because of this they have had to pull out so they can look after my nan.
The mortgage broker they were using is saying they have lost the £1000 arrangement fee.
I find this hard to believe as they had the option to add this to the mortgage so how would the bank have got on if they chose this option?
Would someone be able to tell me if this is the case? it doesn't seem right that their arrangement fee is non-refundable as the mortgage hasn't been taken out.


Thanks in advance for any advice you can give.

ACG

There should be a KFI, section 8 will have the fees and explain if it is refundable or not.

However, some lenders do say it is non refundable should the mortgage not proceed. This is why I always discuss adding it to the mortgage and paying it off on day one should they want to - it just helps to protect it in this sort of situation.

amnblog

As ACG says.


It is naughty, but with some lenders these fees on not refundable once application has been made.


Caveat Emptor

kingstreet

Have they actually paid the fee, or not?

If they haven't, I can't see how the lender is going to get it from them.

This is definitely a lender arrangement, and not broker fee? If it has been paid, to whom did it go?

daryl_1875

Thanks for the info, i'll get him to check that.


Yes definitely an arrangement fee, there is no broker fee as he has used the estate agents in house broker.
I believe he paid it to the broker and they were going to forward it on, I need to check that though.

ACG

I can only speak for myself but im not allowed to hold clients money, I didnt think any broker was.

kingstreet

As ACG said, section 8 of the key facts illustration will cover fees and if they are refundable.

If you don't have it, but know the lender name/product someone may be able to find out.

GMS

daryl_1875 wrote: »

I believe he paid it to the broker and they were going to forward it on, I need to check that though.

Was it a cheque made out to the lender? If it was cash then there is a potential massive problem for the broker.

daryl_1875

Ok I have some more info.
The lender is Natwest.
They took the money off the same debit card that they used when they paid for the surveyors valuation so didn't pay the broker direct.

kingstreet

AIUI from another client's KFI;-

Arrangement Fee £995.00
Payable on application
£995 will be refunded if the mortgage does not proceed, terms and conditions may apply

However, NatWest does charge a £150 fee if the mortgage doesn't complete after the offer has been issued.

FWIW this KFI was dated 2/9/14 and was for product code FO8731 a fix at 2.99% until 31/12/2016

daryl_1875

Thanks kingstreet, appreciate that.
I think he will accept £150 but losing a grand is a bit much.
I'll let him know