Paid an application fee today ( but confused as to what it means)

folkestonelisa

I paid ( unexpectedly) an application fee and wasn't sure if that meant they were going to offer me a mortgage.

Background: have employed a broker as not a straightforward mortgage ( adverse credit) and he submitted our firms about two weeks ago. Asked for extra info last week which we sent them, broker said he would keep us updated. Today an email from the building society asking for a application fee. Spoke to broker who was surprised and said to pay and he will keep us updated.

Is it a good sign that they are considering offering us the money?

ACG

Have you had a Mortgage illustration?
There is a section related to fees, what does it say about fees?
Your broker is surprised about a fee? They should know what fees are due and when, as should you (your broker should have made it clear to you) before making the application.

folkestonelisa

Not had anything about a mortgage at all. I just assumed they were going to look at our application and say yes or no they could/couldn't consider us for a mortgage.

Our broker was surprised they were asking for fees now. He thought it was a good sign ��

ACG

Your broker is doing things very wrong, you should have received a KFI or ESIS document before applying. You should know what you are applying for before you apply.

Not only is your broker not following the rules, neither of you know what you are applying for which is pretty shocking.

The fee you have paid could be a valuation fee (that would be the case usually if it is between around £175-500), it could be a booking fee (usually £99 or £199) or it could be an arrangement fee (usually £499, £999 or £1499). But it is a regulatory requirement that you know what you are applying for before applying.

folkestonelisa

I did think it was a bit strange as I have no idea of what the repayments amount are or even what we are applying for.
Speaking to hubby he said he remembers the broker asking at the time if he could apply for the mortgage (we only had one or two open to us due to our circumstances) if he found one, so I'm guessing that's what he's done? Would we still need to see anything if that was the case?

We had some forms last week that included a direct debit form and ( what I thought ) was a basic mortgage application form, but it didn't mention any fees or anything. We received a basic email today with this line and that was basically it,

Please note, we require a payment from Xxxxxx for the required fee of £175.00, this includes the application fee.

ACG

Most of my clients have adverse, some of those are limited to one or 2 lenders, I still explain what the rate, fees and repayments are before doing anything. Some lenders have rates that filter down depending on how your application scores, in those circumstances I would probably give client best and worst case scenarios and then do a DIP if client was happy to move forward.

But without doubt, you should know the rates, fees and repayments before commiting to anything. What happens if you do not agree to the products they have available?

folkestonelisa

I'm presuming that if I don't agree, then I don't get the mortgage, lose £175 and the broker loses his fee!!
I'm presuming that I'm just going to have to wait and see what happens ( having had a look they do offer competitive rates ( I think) and seem decent) so I'll keep my fingers crossed I find out soon what the mortgage is and I'm able to pay it, ( it's been a stressful month, waiting so far, so I hope it's quick)

Thanks for your help ACG

jlaw4

As ACG said, thats so wrong. You need to contact the broker and ask for a mortgage illustration, mine was sent via email straight after i asked.

Just because you have adverse credit, doesn't give the broker a right to 'just apply and hope for the best!' What if you don't have the next set of fees available and aren't expecting it? Go back and make sure he explains it all to you, especially the rate and amount you would pay monthly as you have no idea what you are agreeing to.

Neutrinno

This is very concerning at how your broker hasn't explained any details of what he is applying you for!! He is applying you for credit and in the process leaving footprints on your credit reports, but without even keeping you in the loop on what you are applying for. This is very unprofessional and not how a broker should be working. Do you really trust this broker to lead your application any further? I'd stop him right now and allow an experienced broker to take over, one who will actually explain things to you and make you aware of what you are actually applying for!

This is probably your biggest financial transaction, and you both don't have any idea on what is going on by the sounds of it.

folkestonelisa

The broker is the senior broker at the firm and came highly recommended. I'm due to speak to him tomorrow so I will see what he says.