life assurance sold with mortage - am i tied in?

tudorfan22

in june 07 i got a mortgage through a broker and that all got arranged. he said that if i got life insurance and hom and contents insurance through him i wouldnt have to pay his fees of £500. the thing is im tied into this for 5 years he said. the two policies are £35 each which i think are pretty high. my question is has anyone else heard of this happening, am i REALLY tied to these deals for 5 years and if i am would i then have to cough up £500 to my old mortgage broker? i cant find any documentation on it, although i havent looked that hard cos its a mess!!!

any help would be great;y appreciated!

Ludders_2

tudorfan22 wrote: »

in june 07 i got a mortgage through a broker and that all got arranged. he said that if i got life insurance and hom and contents insurance through him i wouldnt have to pay his fees of £500. the thing is im tied into this for 5 years he said. the two policies are £35 each which i think are pretty high. my question is has anyone else heard of this happening, am i REALLY tied to these deals for 5 years and if i am would i then have to cough up £500 to my old mortgage broker? i cant find any documentation on it, although i havent looked that hard cos its a mess!!!

any help would be great;y appreciated!

If you agreed with the broker to keep the policy for 5 years to avoid paying his fee then of course you have an obligation to him. You could of course contact the broker and voice your concerns about the cost of the insurance and see what he will do for you.

Your broker seems to have acted fairly offering you the choice of paying a fee or paying him with commission from a policy. Lets be fair he should be paid for his work.

dunstonh

Yes. If you agreed a fee for advice and the fee was paid by use of insurance policies in the way mentioned then you have to stick with it.

You probably did it wrong. What you should have done was agreed the £500 fee and have the insurance policies set up to pay £500 commission. This would have lowered your premiums.

Your broker seems to have acted fairly offering you the choice of paying a fee or paying him with commission from a policy. Lets be fair he should be paid for his work.

If its customer agreed remuneration its fair. However, chances are its full commission paying around £1500 to cover a fee of £500. Had the adviser lowered the commission to match the charge, the premiums would have been lower and that is fair.

tudorfan22

thats no probs, thanks for your info. im probably being ripped off in the long term but its my fault so no probs - i can live with that! so much to deal with when youre arranging a mortgage, i guess i was just glad it was one less job to do!

roll on 5 years time when i change providers!