Mortgage valuation fees

irobot8

Hi all,

We're in the process of buying a semi-detatched bungalow in the South-East, and would appreciate some advice on mortgage valuation fees.

To give the background, the seller's agent emailed us on Tuesday to confirm the mortgage valuation was booked for Wednesday. We'd previously forwarded £350 to the Mortgage Broker to cover fees for the valuation.

Late on Wednesday (5pm), the Mortgage Broker emailed to say the mortgage application had been assessed by an underwriter, and that the provider had reduced the amount they were willing to lend by £13K! This makes the purchase unaffordable.

The Mortgage Broker has suggested the £350 valuation fees are non-refundable. However, the provider had changed the offer after the valuation took place, so this seems unfair.

Does anyone know if we can challenge this and have the valuation fees refunded? If so, how would we go about this, and who would we contact?

Many thanks in advance,

IR8

davidmcn

Was the amendment of the offer done in light of something in the valuation?

irobot8

According to the Mortgage Broker, the amended offer doesn't appear to have had anything to do with the valuation. Rather, given the previously agreed number of years to repay the loan (15), the underwriter assessed that it does not meet their affordability criteria - so simply reduced the amount they're willing to lend.

Thrugelmir

Can you not extend the term slightly. To meet underwriting criteria.

However, the provider had changed the offer after the valuation took place, so this seems unfair.

Valuation is performed by a third party. Someone has to pay the cost, i.e. the applicant.

eddddy

So the underwriters looked at your affordability, and decided they would only only lend you £13k less.

I guess you can argue it either way. Had the lender waited for an underwriter's decision before booking the valuation, you might be complaining about the resulting delay in valuation.


As you are employing a mortgage advisor, maybe they should have warned you about this possibility. And maybe they should have done a better job of assessing your affordability before submitting your application. (TBH, I don't know if that's a realistic expectation of a mortgage advisor or not.)

ACG

If the loan amount has been reduced to affordability then you need to look at what has changed between application and underwriting.

It is either your fault for providing incorrect information to the broker or the brokers fault for not checking it. If it is the latter, then the broker should cover the costs (that is what we would do without the customer having to ask - I have done it once before, I have never done it again as it was a £400 lesson I learnt from).

irobot8

So, on querying the Mortgage Advisor re: what happened between application and underwriting, this is the basic response (which doesn't really answer the question): The bank won't refund the valuation fees, and it's standard practice for lenders to instruct on getting the valuation done on receipt of the application, and the file then gets passed to the underwriters thereafter.

This certainly wasn't communicated to me prior to handing over the valuation fees.

Does anyone know if it's worth raising this with the Financial Ombudsman Service?