Application Arrangement Fees - Mortgages!

snax0

:mad: IS IT REALLY JUST ME - or are mortgage application fees a total and utter rip-off? My worry is that these are a result of us all (well nearly all) becoming money savvy & more aware (thanks Martin) - about the stunts banks have pulled on us!

I know application/arrangement fees can be added to the loan but isn't this just all the better for the banks?

Sorry to rattle on but does anyone know where I can get a free mortgage without having to pay an extra £995 on top just for signing the papers? I am currently "with The Woolwich" - and to switch they want to charge an extra £100 on top of the £995 JUST BECAUSE I AM ALREADY AN EXISTING CUSTOMER!

I'm sorry but I really find this practice disgusting! Am I missing something here?

Savvy friends - please please help me if you can...

Snax0

KTF

Ah... another one of these threads. Dunstonh will be along in a minute but if you dont like the fee then choose a product that doesnt have one.

By paying the fee you are 'buying' a product that has a lower rate than one with no fee. In order to get this low rate the bank has to buy it from the money markets, process the admin, etc. which all costs money.

Here is another thread that covers the same ground: http://forums.moneysavingexpert.com/showthread.html?t=622171

And here: http://forums.moneysavingexpert.com/showthread.html?t=623965

wymondham

the fee's are high, and seem to climbing. suppose it's up to you if you pay it and hence buy the product.... shop around for better deals, there are some for a fraction of the amount the Woolwich are asking. There is no loyalty for staying put these days....

I suppose you need to ask yourself how long would it take on this new deal would it take to get my £x back that I paid for it....

Dylanwing

People move mortgage far more often, that costs the lenders money, and there is a lot of work in processing a mortgage application.

_Andy_

How dare those nasty mortgage lenders want to make a profit!

dunstonh

Oh God not another one. I am going to have to add a bookmark to an old thread and just copy and paste the same old responses as this is such an FAQ. What happened to the days when people used to use Search or lurk before posting an FAQ?

IS IT REALLY JUST ME - or are mortgage application fees a total and utter rip-off?

No, its not just you. There are others who dont understand the mechanics of a fixed rate arrangement that come here and blurt out the same old thing about it not being fair and a rip off.

I would love to know the occupations of the people that whinge about these as they must all be charity workers. They surely cannot be self employed or employed in an industry that has costs and needs to make a profit.

Sorry to rattle on but does anyone know where I can get a free mortgage without having to pay an extra £995 on top just for signing the papers?

Stick with the mortgage you have. You dont get charged unless you buy a new mortgage. No-one is forcing you to buy a new mortgage and no-one is forcing you to pay £995.

and to switch they want to charge an extra £100 on top of the £995 JUST BECAUSE I AM ALREADY AN EXISTING CUSTOMER!

I bought a new car this year. I think i will go back to the dealer and get them to replace it with another new one and I dont see why they should charge me again because I am an existing customer.

I'm sorry but I really find this practice disgusting! Am I missing something here?

If you dont pay the costs involved in financing a fixed arrangement who is? I dont want to pay for your fixed rates. That would be disgusting.

Out of interest, what occupation do you have? I'm guessing it isn't retail, supply or service?

snax0

Not wishing to offend you, I have to assume you are the fat cat of one of the big four?

I'm not a charity worker - though by the time I've arranged the mortgage I will probably be a charity case!

I understand even banks need to make a profit - don't we all? But I certainly think the money is better off in my pocket...

AND do you honestly think they should charge me an extra £100 MORE on top of the £995 just because I am already a borrower - they know me, they don't have to check me out, I have a perfect record for paying back the mortgage over the last four years and they don't even need to check out the house - how can this possibly cost them MORE money?

As it happens I have spent the last 17 years working for a commercial vehicle retailer - studied Accounts to A-Level and loved it (got an A - so no, before you ask I didn't bomb out) - and now I am an office manager of a Ltd engineering company (and in the process of setting up my own company too)...

How does it matter what I do, I still don't want to overpay - and I am making no apologies for that. After-all, that's why I am on this site. I thought we were all in it together? No? Maybe you ARE a bank cat afterall..?

KTF

Which part of the IFA signature makes you think that dunstonh is a bank employee? What is the extra £100 for? The exit fee from the previous mortgage? And why have you chosen to stay with the Woolwich given that you dont like the fee. Have you investigated other lenders offerings?

Edit: By paying the arrangement fee you may be saving money compared to a standard SVR mortgage (or one from another lender) but then you have crunched the numbers and worked that out I assume otherwise you wouldnt be considering the product with the £995 fee...

snax0

if the £100 is for exit fees does that not prove my initial suggestion that the banks are just finding (and cashing in on) other ways to claw back those unfair charges we've been reclaiming?

And I personally haven't claimed any back because I never paid them in the first place...

I feel as if I am getting into an argument over this - something I totally did not expect.

As I have said before - I understand even banks have to make a profit, I just kind of expected someone to say - "Yeah, the charges are a real scam - but you could try this or this or this - or have you seen this product, it's a really good deal!"

Perhaps I was wrong and the huge hike in mortgage arrangement fees are to pay brokers and financial advisers?

It's just a thought.

KTF

If it is an exit fee then it would have been documented when you took the mortgage out and they have been around long before people started claiming back charges. You are entitled to claim back the difference in the amount in the original documentation to the the one are now being quoted (if there is a difference between the two).

Aside from being unable to offer specific advice on the forums you have not mentioned the size of the mortgage, term, whether the deal you are looking at is a fixed or a tracker, what sort of deal you are looking for, etc, etc so how can anyone recommend something else? You also didnt ask this question in your original post.

Have you had a read through the 2 links I posted? In there is explains the arrangement fee and where it goes and if it did go to brokers then why does the bank charge you the same fee when you deal with them direct?

snax0

I have looked at the threads - thank you for taking the time to post them.

The £100 is not an exit fee - I thought you were suggesting this in your previous thread. It actually says on the Woolwich's downloadable mortgage rate table that there will be a £100 charge extra for existing borrowers.

I don't expect anyone to do my donkey work for me with regards to recommending a mortgage - I just thought that there MUST be someone out there who could honestly say - "Well, I just renewed with so and so bank and I'm really happy with my deal!"

Thanks again for your time.

Snax0

Oh - and why would banks charge you fees for dealing with them directly - because they are profiting hugely from us - and this is one of the ways in which they may do this.