Application Arrangement Fees - Mortgages!

Kaz64_2

Conrad wrote: »

Kaz, thats not correct.

Assuming this is a lenders, not a brokers fee, you will never pay it up front, it's either added to the loan on completion or simply paid by you or deducted from the loan at completion. Once you complete your totaly commited anyway so the house falling through bit is irrelevant.

Thanks for the info, Conrad.

So my broker is telling me Porkies then? Hmmm. So my best bet is, on completion, to pay those fees up front? Would that automatically be taken off my loan, or do I have to change some paperwork?

aah

beingjdc wrote: »

- the fees are steep, but it's a marketing device to make the interest rate look low. There are plenty of deals with a low or no arrangement fee, but you pay for it in the interest rate. Take your pick.

This is it in a nutshell. What beleaguers me is why the OP was so slated for needing just this small piece of advice and information.

Its about time this thread adopted the motto of the DFW posters

Pls remember (....these posts are....) for support and help not judgement

KTF

If the OP had asked for an explanation of the fee rather than jumping in with both feet ranting about how 'unfair' they are then the response may well have been different.

snax0

MarkyMarkD wrote: »

£100 as a mortgage review fee is far less than the exit fee and far less than it would cost in legal and valuation costs to remortgage elsewhere. They charge it because they can and because people are willing to pay it.

Like it or lump it - or pay the SVR rate you agreed to pay after your introductory 2 years, or whatever.

It's your choice.

As I (and others) have posted before, almost all fixed rate and discounted/tracker rate mortgages are actually loss-making for the lender, taken on the rate alone. It's only fees that make the lender profitable overall.

OH PLEASE! - You think they incur a loss??? Anyway - £100 and I wouldn't be moaning - it's actually £995 PLUS £100 (the £100 purely because I am a customer of theirs anyway!

But thanks for your comments.

snax0

dunstonh wrote: »

Some of the providers have two rates available. One with a low charge but higher rate and another with a high charge and a lower rate. Obviously the latter suits the larger mortgage. If a lender only has a high charge and a lower rate then it would indicate that they are targeting large value mortgages. That doesnt make their deal a rip off. It just means it is not suitable for you.

Mortgage advisers get paid the same from that lender regardless of deal. The money isnt going into their pockets. As you have read the other threads, you would now realise that the profit is being moved into charge and not the interest rate. Many people believe that the banks profit from the interest rate but that is not always the case. Especially on fixed rates.



Mortgages are a retail product. If someone was sold a vehicle can returned 2-3 years later wanting a new vehicle would you give it to them free of charge? Buying a new fixed rate is a new retail product.

No, we wouldn't have GIVEN them a vehicle free of charge but we wouldn't have charged them an "arrangement fee" for buying another one - actually they might even get a discount!!!

snax0

Thank You - Thank You!!! Where IS Martin Lewis when you need him? MARTIN - what do YOU think - do you think the banks aren't making a profit from us???

I'd LOVE to hear YOUR opinion!

dunstonh

No, we wouldn't have GIVEN them a vehicle free of charge but we wouldn't have charged them an "arrangement fee" for buying another one - actually they might even get a discount!!!

So, what you are saying is that you would not have sold that vehicle at a profit but done it at a loss or break even?

Remember the mortgage has no profit in the fixed rate. So the mortgage is the product. The only earning point is at arrangement and after fixed rate ends assuming you go onto variable. The profit is in the arrangement fee. So, unless you sold vehicles at cost then you did exactly the same as the lender.

MarkyMarkD

snax0 wrote: »

OH PLEASE! - You think they incur a loss??? Anyway - £100 and I wouldn't be moaning - it's actually £995 PLUS £100 (the £100 purely because I am a customer of theirs anyway!

But thanks for your comments.

Of course they incur a loss on most fixed and discounted/tracker rates. Do you have a clue what you are talking about, snax0?

LIBOR today was around 5.75% - that's 0.25% above bank base rate. Banks lend to each other at (generally) more than LIBOR.

Co-op Bank (for example) will lend on a 3 year "Co-op members only" mortgage at BBR+0.24% - and this product has no fees at all, and they pay your legal and valuation costs.

If you think that this rate is making them money, get a new calculator. Indeed, this product doesn't make money on any measure.

There are huge numbers of mortgage products out there which don't make money without the fees, and a smaller number which don't make money full stop of which the Co-op one is one example.

Woby_Tide

snax0 wrote: »

No, we wouldn't have GIVEN them a vehicle free of charge but we wouldn't have charged them an "arrangement fee" for buying another one - actually they might even get a discount!!!

discount = playing with trade-in figures

then you levy a credit card charge(try and chuck in an extended warranty and service plan)..but no arrangement fee


maybe you could just see the mortgage review figure as someone kicking the tyres then sucking their teeth as they tell you there's a bit of a scratch in the paintwork and a ding in one of the bumpers

toonfish

It is truly, truly bizarre that people are honestly expecting banks & building societies to subsidise their home purchase.

It's been said dozens of times but if you don't like the fees, simply choose a product without them.