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Mortgage Broker chasing his fees.

Hi all, I went to see a mortgage broker to remortgage a tenanted property. I told him I want 100k from the remortgage with the property worth £155000 and rent at £800. He said it should be OK to get this amount.

At our second meeting, he said I can only get 86k with the £800 rental income. So I said OK, and said 86k is the minimum I want from the remortgage.

So after valuation, the lender said property value is £155000 and rental income £750. Then they offered me 78k offer through the post. So 10% less than what I wanted.

Now the mortgage broker is asking me to pay him the fees for getting the offer.

I feel the mortgage broker should of contacted me after valuation to let me know the lender could only offer 78k with the rental income. To ask me do I still want to go ahead it not. But he did not, and only contacted me a day before the ducuments arrived by post.

Is it not a procedure for the mortgage broker to contact me after valuation for a buy to let remortgage  to see what the lender can offer me. To see if it was OK with me to go ahead or not?

And I don't really know what I really should do. The 78k is too little, which I'm not gona accept and the broker chasing me for his fees. 

He saying he got me a offer and I have to pay. 
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Comments

  • Brokers get paid from the lender they place you with.
    Valuations are instructed by you.
    Affordability criteria will always be judged by a lender, not broker.
  • The problem is he said I could get 86k that's why I said go ahead. In the end I was offered 78k. As I am not accepting this offer, I surely should not have to pay the broker fee to him right? 
  • Also should he not of told me after valuation that I could only get 78k, so I can decide to  continue getting the offer or discontinue it? 
  • silvercar
    silvercar Posts: 48,689 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    Did you take the 78k or not? If you didn't take the money then there shouldn't be anything to pay.
    I'm a Forum Ambassador on the housing, mortgages, student & coronavirus Boards, money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • Leng18 said:
    The problem is he said I could get 86k that's why I said go ahead. In the end I was offered 78k. As I am not accepting this offer, I surely should not have to pay the broker fee to him right? 
    Not necessarily - if you agreed to pay him to find an offer, he's done that.  If you agreed to pay him when you take the offer, then he hasn't.  What does your contract say?

    And I don't think he would have actually said "I guarantee that you will get £86k".  Probably more likely "you should be able to get £86k based on survey and valuation".
  • kingstreet
    kingstreet Posts: 39,118 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Is the broker looking for another lender to get to, or at least closer to, the amount you require? You are actually receiving £800 per month, gross rent?
    I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.
  • dunstonh
    dunstonh Posts: 118,599 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Now the mortgage broker is asking me to pay him the fees for getting the offer.
    The mortgage broker is asking you to pay him for doing the work that you agreed to.

    I feel the mortgage broker should of contacted me after valuation to let me know the lender could only offer 78k with the rental income. To ask me do I still want to go ahead it not. But he did not, and only contacted me a day before the ducuments arrived by post.
    Once the application is submitted to the lender, the broker is largely out of the picture.   The broker would likely have found out a similar time to you.

    Is it not a procedure for the mortgage broker to contact me after valuation for a buy to let remortgage  to see what the lender can offer me. To see if it was OK with me to go ahead or not?
    No.

    The problem is he said I could get 86k that's why I said go ahead. In the end I was offered 78k. As I am not accepting this offer, I surely should not have to pay the broker fee to him right? 
    The broker has no control over the valuation.  You are meant to give the broker an honest value and you hope the valuation is in line with what the valuer comes out with.  The broker checks your affordability to see whether your application is realistic but the valuation is an unknown to them.

    Most brokers fee terms require you to pay the fee at or before the application is submitted.  In your case, the application was submitted.

    Also should he not of told me after valuation that I could only get 78k, so I can decide to  continue getting the offer or discontinue it? 
    As you seem to be aware of that, you appear to be have been told that was the case.  That normally comes from the lender.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • ACG
    ACG Posts: 24,243 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    You went to the broker for £100k.
    They told you they could get you £86k. You proceeded on that basis. 

    They have not obtained £86k and what they can get you is not going to work. Thats the brokers problem and one of the risks of being a broker. We are always at the mercy of the valuer. 

    The broker has the option (in my opinion):
    - Knock it on the head and you both go your separate ways. 
    - Appeal it based on the fact you are in receipt of higher rent (unlikely to work but no harm in trying).
    - Try a different lender. 

    But as it stands I dont think the broker has a leg to stand on.You went to them for £100k/£86k, they have not supplied you with it.

    The only exception to that I can think is if they charge their fee on DIP/Application. Ultimately at that point they are charging their fee regardless of the outcome. I dont agree with that personally, but it is allowed and especially with it being a BTL you are treated with big boy pants as a business rather than consumer rights as an individual. 
    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.
  • silvercar said:
    Did you take the 78k or not? If you didn't take the money then there shouldn't be anything to pay.
    I have not signed and have not returned the acceptance document to the lender. And solicitor not started any work yet too. 
  • saajan_12
    saajan_12 Posts: 4,478 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Lots of assumptions on what the brokers fees were conditional on. The reality is there can be various different agreements and charging schedules, eg 
    - fixed fee for working with you at all, paid by customer
    - conditional on getting you an offer, paid by either customer or lender 
    - conditional on mortgage being drawn down, paid by lender

    You need to establish exactly what the agreement was with the broker. This may or may not be conditional on whether you agree anything with the lender. 
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