Application Arrangement Fees - Mortgages!

_Andy_

eldowardo wrote: »

these fees generally are disgusting and its nice to hear someone saying so... in one of those threads I got slated by some of these that have an interest in the business and get a cut of the deal even though they deny it x

Out of interest, what would you consider a 'fair' fee to be?

Noz

eldowardo wrote: »

these fees generally are disgusting and its nice to hear someone saying so... in one of those threads I got slated by some of these that have an interest in the business and get a cut of the deal even though they deny it x

nice borderline libelous comment there

dunstonh

Especially as a number of us that responded dont earn a penny out of mortgage business.

Perhaps the easiest thing is for the banks to stop all fixed rate mortgages and then you wouldnt have any complaints about fees. Of course, you would be paying more each month but that doesnt matter.

PasturesNew

dunstonh wrote: »

Especially as a number of us that responded dont earn a penny out of mortgage business.

Perhaps the easiest thing is for the banks to stop all fixed rate mortgages and then you wouldnt have any complaints about fees. Of course, you would be paying more each month but that doesnt matter.

As I recall, about 1999/2000 time that was pretty much the way things were.
Fixed rates were more expensive than the SVR.

It seems, as a layman, that this concept of discounted, fixed, lower mortgage payments is a fairly newish phenomenon.

The mortgage I chose was variable rate with no redemption penalties. You never know when things will change and that, to me, seemed to be most flexible/manageable. But then, "in the olden days", we did look more at "worst case scenarios" for mortgage rates. I've always thought 8% to be the average rate, so even now it's "quite cheap" so to speak.

TEDDYRUKSPIN

SERIOUSLY?

The results of all these fees is a result of all of us! Blame yourselves. Customers nowadays demand cheap interest rates! They no longer want to pay for booking fees and hence, the brilliant arrangement fees arise! To make it even sound much better, you can now slap this onto your mortgage?

90% of idiots do this! Come on...... £3k on to the mortgage over 25 years? Are you really that stupid?

The only company I know that don't try to cheat you is HSBC up to now. Booking fee which is reasonable. No arrangement fee. No exit fee.

Now....! No one forces you to go with that company! It is all down to yourself.

Enough said.

dunstonh

Come on...... £3k on to the mortgage over 25 years? Are you really that stupid?

3k fee on a fix could save more money than a £150 fee on a fix for some people.

That is why choice is good.

MarkyMarkD

_Andy_ wrote: »

Out of interest, what would you consider a 'fair' fee to be?

I assume that question was rhetorical, but anyway. There is no such thing as an unfair fee in this context. Nobody is forced to pay any sort of product fee - everyone can get a mortgage with no fees at all. But the rate will necessarily be significantly higher than on a mortgage with a fee.

A big fee isn't unfair; a small (or no) fee isn't necessarily any fairer.

MarkyMarkD

TEDDYRUKSPIN wrote: »

SERIOUSLY?

The results of all these fees is a result of all of us! Blame yourselves. Customers nowadays demand cheap interest rates! They no longer want to pay for booking fees and hence, the brilliant arrangement fees arise! To make it even sound much better, you can now slap this onto your mortgage?

90% of idiots do this! Come on...... £3k on to the mortgage over 25 years? Are you really that stupid?

The only company I know that don't try to cheat you is HSBC up to now. Booking fee which is reasonable. No arrangement fee. No exit fee.

Now....! No one forces you to go with that company! It is all down to yourself.

Enough said.

If you are paying a mortgage rate lower than your marginal savings rate, it is right to add the fee to the mortgage. If you are borrowing at (say) 4.99% with a £2,499 fee - as my friend was - and have a non-working spouse who isn't a taxpayer, you can earn WAY more than 4.99% on your savings. Paying the fee up-front in those circumstances is stupid.

Choosing a large fee product can easily be best value, if you have a large mortgage. A £2,499 fee is only 1% of the loan if your mortgage is £249,900; if you are saving over 0.5% on the rate each year than it's worthwhile. And 4.99% was more than 0.5% cheaper than the rate my friend would otherwise have paid.

Generalising is wrong; calling mortgage product fees "unfair" is wrong. Having a choice of products, and choosing the right one with good advice, is the way to avoid being "ripped off" - but the person doing the ripping off, if you are ripped off, is yourself for not getting appropriate advice or simply making a poor product choice.

_Andy_

MarkyMarkD wrote: »

I assume that question was rhetorical, but anyway. There is no such thing as an unfair fee in this context. Nobody is forced to pay any sort of product fee - everyone can get a mortgage with no fees at all. But the rate will necessarily be significantly higher than on a mortgage with a fee.

A big fee isn't unfair; a small (or no) fee isn't necessarily any fairer.

Absolutely agree - I was just interested if the poster had an amount that they thought wasn't a 'rip off' in mind.

MarkyMarkD

Yes, Andy, I assumed that was what you were looking for. I'd like to hear that answer, too.

And any answer which ignores the negative margin on the interest rate will get 0/10.