WARNING - HSBC ot refunding unsucessful mortgage application product fee

fred246

Thanks for the warning. Unfortunately on this forum are some IFAs. They charge thousands of pounds for filling a few forms in. Only they could possibly argue that a charge of £999 was reasonable for answering a few online questions. It tells you a lot about IFAs and mortgage advisors.

Thrugelmir

fred246 said:

Thanks for the warning. Unfortunately on this forum are some IFAs. They charge thousands of pounds for filling a few forms in. Only they could possibly argue that a charge of £999 was reasonable for answering a few online questions. It tells you a lot about IFAs and mortgage advisors.

More than likely in due course the fee will be refunded. From HSBC's perspective most likely a low priority task at the current time.  With the bulk of the available staff resources targetted towards productive activities. 

dunstonh

Fred doesnt pop in the mortgage forum a lot but is a known troll in the investments and pension section.   His sole purpose on this site appears to be slagging off IFAs.    

There is some irony here though. Fred trolling about IFAs and mortgage adviser fees.  yet had a mortgage adviser been used, this could have been avoided.

haras_n0sirrah

So client fills in forms wrong and gets charged thousands of fees. A broker in this instance would have saved the clients thousands by not putting them with a lender that a) wouldn't lend and b) wouldn't have advised to pay a non refundable admin fee upfront.

This is why it is can be good to pay a broker a few hundred (note not thousands) to help you to fill in the forms if you don't know what you are doing to make sure that a) the lender is the right one and b) to make sure that you get the right advice/ product for your circumstances.
In this instance a broker would have saved the client thousands 

If you think a broker just fills in a few forms then you have no idea what we do and that we carry liability for incorrect advice for life. You aren't paying a broker to fill in the form, you are paying a broker for their knowledge of knowing which lenders form to fill in and how to fill it in to maximise your chances of getting a yes. On 3 occasions last year I had clients who went direct to a lender, got declined by said lender and then we put them back with the same lender and got them an offer.

heston2014

PaulCarpenter said:

Beware if making online mortgage application with HSBC - See how they treat young vulnerable first time buyers!

On 14th June 2020 my son and his partner made an online application for a mortgage.  Part of the process involved paying a £999 fee to guarantee the rate being offered that day.  They paid the fee and continued with the application.  Within 10 minutes the application had been rejected – without a reason given.  They assumed the £999 would not be taken or, if it had, be automatically refunded that day.

 On 15th June they rang Customer Services the next morning as the money had been taken from the account and was told the payment would be automatically refunded with 3-5 working days (by 19th June)

 On 26th June at 12 noon they rang again as the money had not been refunded.  His partner was told that as my son was the 1st named applicant, they couldn’t talk to her and that refunds had to be requested – despite the operator on 15th June not raising that issue.  At 6pm that day my son rang Customer Services requesting the refund and was told it would be refunded within 3-5 working days (by 3rd July)

 On 6th July the money had not arrived. he rang at 8am and was told there was no reason why the money wouldn’t be automatically refunded and it would be with us with 3-5 working days.

 As at 4pm on 9th July the money has still not arrived.

 They are first-time buyers with limited funds.  They need that £999 to pay fees and costs associated with the purchase of our first home.  It is unfair that a multi-billion organisation is refusing to refund their money.  They feel the £999 was tricked out of them by the way in which the online process was presented.

Posted as a WARNING

We applied online with a £999 product/booking fee, but there was an option to pay later.  The fee is non-refundable and payable prior to an offer being made by HSBC.  If they obtained a DIP prior to submitting a full application, they still would have been able to submit their application without paying for the fee until it's been underwritten.
We applied directly with no advise, I must admit that HSBC application system isn't great and if you don't read everything word for word, it is easy to miss key information on the online form.  One being the option to pay fee later. 
The process we followed were:

1. Create an account on Online Mortgage Portal
2. Apply for a DIP
3. Apply for a Quote
4. Select Product with or without Fee
5. Full Application and selecting option to 'Pay Later' for the fee.  It clearly states on the Quotation that the Fee is non-refundable.
6. Once application has gone to underwriter and valuation completed, prior to an offer being generated, fee must be paid which is also clearly stated on the online application.

If they did not obtain a DIP and went straight to Full application, IF there was something on their credit file, this could be a reason why application got declined (we were hard searched on the point of submitting a full application).  And since they paid upfront, unfortunately, they agreed to to the terms of the mortgage product that fee is non-refundable.  They should appeal the decision as it might be something that got missed off the application, if Credit File is in good order, then they can submit a new application and in theory (if HSBC agrees of course), transfer the product fee onto the new application unless it has been removed.  If they are able to find out the reason for the decline and perhaps submit a new application but talk to HSBC.

csgohan4

fred246 said:

Thanks for the warning. Unfortunately on this forum are some IFAs. They charge thousands of pounds for filling a few forms in. Only they could possibly argue that a charge of £999 was reasonable for answering a few online questions. It tells you a lot about IFAs and mortgage advisors.

Blame someone else other than yourself for not filling in forms correctly/ looking at the T+Cs. Broker fees are in the thousands, where did you pluck that figure in mid air, or do I sense that you want advice and not pay for it and bitter about it

You could always try L+C, you get what you pay for

The modest fees of a few hundred, goes towards compliance costs, platforms to look at your mortgage requirements, insurance e.t.c...

Do you have access to broker only platforms to get the best whole of the market deal for your mortgage, or are you stuck on best buy tables which don't get updated and are click and baits?

fred246

I don't have a mortgage but if I did I would never dream of paying an 'adviser'. I didn't know that such a thing still existed. That's the last thing you'd need an 'adviser' for. You can probably find a better deal yourself within a few minutes.

csgohan4

fred246 said:

I don't have a mortgage but if I did I would never dream of paying an 'adviser'. I didn't know that such a thing still existed. That's the last thing you'd need an 'adviser' for. You can probably find a better deal yourself within a few minutes.

what about the broker only deals, or the fact you are unlikely to need a 2 hour telephone interview with the lender, the broker does more than just fill in a few forms, forms which you may struggle to fill in or use a considerable amount of time to fill in. 

I get you may have had a bad experience and there always be bad apples, but a few bad apples shouldn't tarnish the rest, Unlike you I've used successfully brokers covering life assurance, income protection to mortgages and financial advice. Some paid some no fees.

Personal preference on using a broker, your choice, but there some things brokers have access which Joe public don't, excluding them would not be money saving

haras_n0sirrah

Ok then here is a test for fred - no one else answer.
Client comes in, young couple. Cant quite fit affordability but he is in a job with good career progression. They are 24 and 26. Parent willing to go on the mortgage but not on the deeds and with that they would fit affordability. Dad is 49. She is not a uk or eu national but has 2.5 years left on a spouse Visa and will then be changing to a permanent right to remain. Whoopsie they have a default for 150 but it was settled just over 2 years ago. 
They have a 15% deposit. House value of 300k
They would like a mortgage and you can get them one.
Now fred using your best buy tables 
A) which lender
which rate 
C) how long a mortgage can they have 
D) which initial term should they take 
E) what will their monthly payment be 
F) why are you advising all the above (remember if you get it wrong then in 20 years they can claim you missold them the mortgage and try and get multiple thousands off you)
Now I am going to start work so will be back to check your work later and compare notes. 

csgohan4

haras_n0sirrah said:

Ok then here is a test for fred - no one else answer.
Client comes in, young couple. Cant quite fit affordability but he is in a job with good career progression. They are 24 and 26. Parent willing to go on the mortgage but not on the deeds and with that they would fit affordability. Dad is 49. She is not a uk or eu national but has 2.5 years left on a spouse Visa and will then be changing to a permanent right to remain. Whoopsie they have a default for 150 but it was settled just over 2 years ago. 
They have a 15% deposit. House value of 300k
They would like a mortgage and you can get them one.
Now fred using your best buy tables 
A) which lender
which rate 
C) how long a mortgage can they have 
D) which initial term should they take 
E) what will their monthly payment be 
F) why are you advising all the above (remember if you get it wrong then in 20 years they can claim you missold them the mortgage and try and get multiple thousands off you)
Now I am going to start work so will be back to check your work later and compare notes. 

Poor Fred, doesn't know what to do, maybe he will try Mr Google and try a random adverse lender and hit a nut with a hammer? That will cost them more in interest.