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Mortgage broker fee refund
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Penywern
Posts: 2 Newbie
I have recently paid a mortgage broker to secure a loan based on the broker claiming that we could secure a better rate through him via a particular lender. Unfortunately, the lender has denied us the mortgage, but the broker has secured a new loan through a high street lender. The rate that he is now offering is the standard rate we could get if we went directly to the high street lender.
We would like to get a refund on the mortgage broker fees and go directly to the high street lender. Could anyone please advise whether we have grounds to ask for a refund?
The reason we got denied for the initial loan was due to thin credit as we have only just moved to the country, however the broker never did a credit check (despite all the bank statements etc. that we had sent through). We only signed the mortgage broker terms and conditions 12 days ago and paid the fee 3 days ago.
This is what is stated in the terms and conditions:
We will refund our fee if we are unable to secure you a suitable mortgage offer from any lender.
Our fee is non-refundable should your application be discontinued for any other reason, including but not limited to circumstances where:
■ we are unable to secure a formal mortgage offer as a result of inaccurate information provided by you about your personal circumstances;
■ we are unable to secure a formal mortgage offer as a result of inaccurate information provided by you about the proposed property details;
■ we are unable to secure a formal mortgage offer as a result of any other materially inaccurate information provided by you upon which we have relied;
■ we are unable to secure a formal mortgage offer due to your non-disclosure or non-provision of relevant information as required by the lender;
■ we are able to secure a suitable mortgage offer for any mortgage which would reasonably enable your transaction to proceed.
■ you choose to withdraw from the property transaction or terminate the mortgage application process.
■ the vendor withdraws from the transaction.
We would like to get a refund on the mortgage broker fees and go directly to the high street lender. Could anyone please advise whether we have grounds to ask for a refund?
The reason we got denied for the initial loan was due to thin credit as we have only just moved to the country, however the broker never did a credit check (despite all the bank statements etc. that we had sent through). We only signed the mortgage broker terms and conditions 12 days ago and paid the fee 3 days ago.
This is what is stated in the terms and conditions:
We will refund our fee if we are unable to secure you a suitable mortgage offer from any lender.
Our fee is non-refundable should your application be discontinued for any other reason, including but not limited to circumstances where:
■ we are unable to secure a formal mortgage offer as a result of inaccurate information provided by you about your personal circumstances;
■ we are unable to secure a formal mortgage offer as a result of inaccurate information provided by you about the proposed property details;
■ we are unable to secure a formal mortgage offer as a result of any other materially inaccurate information provided by you upon which we have relied;
■ we are unable to secure a formal mortgage offer due to your non-disclosure or non-provision of relevant information as required by the lender;
■ we are able to secure a suitable mortgage offer for any mortgage which would reasonably enable your transaction to proceed.
■ you choose to withdraw from the property transaction or terminate the mortgage application process.
■ the vendor withdraws from the transaction.
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Comments
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They will be using the third from bottom one to get out of issuing a refund.
However, I am not sure that is really allowed. Before submitting a DIP or application they need to have your permission that you are happy to proceed.
They had your permission on the first application but it does not sound like they had it for the second? Or did they have it but now you have found out it is the same rate as going direct you have changed your mind about proceeding?
If the former, I would say you have a reason to get a refund. If the latter, then I would say it is probably your fault for giving them permission to proceed before checking.
Difficult to say without knowing more really.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Either the second from bottom or third from bottom clause could apply here.
I think the second from bottom one is not an unreasonable clause and should prevent a refund.0 -
Sounds like -
- the broker did a fact find
- told you that you are eligible for product x and that you couldn't get it direct
- you gave the go ahead for a full application (or was it a DIP that was declined)
- the lender declined because your case didn't meet criteria
- now the broker offers you another product at a higher interest rate
As a broker myself, I think there's potential enough for at least partial refund here. Don't worry too much about the small print, the overarching regulation that we have to follow is TCF - treating customers fairly.
If you want to pursue a refund, in your place I would file a formal complaint to the firm (making clear why you're unhappy and what you want done as a remedy, and that you will take it to the FOS in the event of an unsatisfactory outcome).
The individual broker is unlikely to say yes to a refund but the complaints/compliance manager might.0 -
I agree with everyone here :-)
They could probably get out of paying due to the terms and conditions but if it was me I would offer a partial refund to keep everyone happy. Sounds like you agreed to pay a few based on an over promise. No malice intended I'm sure
No reason for you to go direct though if its the same as you currently have.0 -
If your credit score is on the edge then cancelling the brokers application and going direct may well push it over as it would be another credit check.
How much is the fee?I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thanks all for your responses and advice, all really useful.
We gave our permission for the first application, but have not given the broker the go ahead for the second application. The broker took it upon himself to complete the credit check with the high street lender before coming to us. We have taken the weekend to mull it over. We only went with the broker as he had promised low interest rates that his relationship manager at the initial bank could offer. The high street lender's mortgage he's now offering us is just standard and the rates are quite high.
Our concern is now probably whether it's worth going through another credit check with the high street bank, as raised by some of you. When my husband and I moved to the UK, we didn't think to apply for credit cards and hence have 'poor' and 'fair' credit scores based on our thin credit history. Is it the case that each credit check has an impact on our scores?
I think I might give the broker a call tomorrow and explain our situation. Perhaps if we stay with him, he could give us a discount on the £1000 fee... Meanwhile, we can give the high street bank a call and see if it's possible to go with them directly.0 -
£1,000 broker fee?! Are you sure you're not including the mortgage product fee in this? If not that's quite excessive on the face of it.
The "credit check" with the second lender might well be a soft check for a DIP, which won't affect your credit rating. But he should still have taken your permission.
If you would like a more informed opinion and don't mind sharing, please do let us know - what was the first lender, what's the second lender, how long have you been in the UK, nationality/visa status, income, mortgage size, house price.
I might well be wrong but my gut says he might have taken advantage of your newbie-ness.0
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