'Sub-Prime' fees made me feel icky.

pinkshoes

dekh wrote: »

It's a bad situation, made worse by only being able to get a poor deal. It's a shame.

But the poor deal is no doubt due to their poor finances and poor credit rating, which is entirely their own fault.

Yes, it is sad, but it's wrong to blame it on the lenders.

Buying a house is not a human right - it's a choice.

Cheap credit is not a human right, it's an earned privilege to those who have good credit ratings.

If you are offered a loan by a sub-prime lender, then no one is putting a gun to your head and forcing you to take it. You may WANT to buy a house, but that doesn't mean it's your right to. Borrowing beyond your means, at a stupid interest rate, with a company who has high charges is a personal choice. Loans have T&Cs which are there for reading.

Buying a house is a HUGE purchase, so you should think through every eventuality when doing it, whether it be a rise in interest rates, splitting up, loss of job, death, pregnancy etc...

minimike2

The broker might not get all of that....depending on how they are set up.

For example, I get 50% of 92% of the original proc fee, as the rest goes to pay for network costs and any commission splits.

Then theres admin costs and lead costs, that can be in excess of £200.

Then theres the tax man to pay.

Just because it says £1600 doesnt mean the broker makes £1600

Kez100

If one party wishes to be bought out, remortgaging is not the only option. The property could be sold. It is not for the likes of lenders to bail people out of distressing personal situations. The individuals must take responsibility and make the best decision for themselves.

WTF?_2

dekh wrote: »

I can't give a professional opinion, as the thread title says : makes me feel icky.

I can only say that I feel the fees outweigh the service provided, both by the lender and the broker.

They aren't buying a home, they are remortgaging to cover the transfer of equity. A transfer of equity occurs, in this case, because one of the parties to the mortgage wants out and the remaining party has to pay over the equity.

It's a bad situation, made worse by only being able to get a poor deal. It's a shame.

Are you complaining about the fact that sub-prime lending exists at all or just the recent massive increase in the cost of obtaining sub-prime deals?

dekh

pinkshoes wrote: »

If you are offered a loan by a sub-prime lender, then no one is putting a gun to your head and forcing you to take it. You may WANT to buy a house, but that doesn't mean it's your right to. Borrowing beyond your means, at a stupid interest rate, with a company who has high charges is a personal choice. Loans have T&Cs which are there for reading.

Buying a house is a HUGE purchase, so you should think through every eventuality when doing it, whether it be a rise in interest rates, splitting up, loss of job, death, pregnancy etc...

Not buying, remortgaging. People get into these situations not just because they may bad with money and budgeting.

Kez100 wrote: »

If one party wishes to be bought out, remortgaging is not the only option. The property could be sold. It is not for the likes of lenders to bail people out of distressing personal situations. The individuals must take responsibility and make the best decision for themselves.

I would say that's a bit simplistic, how quickly can a property be sold in the current property climate? Assume there is little equity in the property so the seller has to break even to clear the current mortgage.

minimike2 wrote: »

The broker might not get all of that....depending on how they are set up.

For example, I get 50% of 92% of the original proc fee, as the rest goes to pay for network costs and any commission splits.

Then theres admin costs and lead costs, that can be in excess of £200.

Then theres the tax man to pay.

Just because it says £1600 doesnt mean the broker makes £1600

It's £2200 not £1600

Just out of curiosity, how long does it take you to arrange a mortgage - in man hours, on average?

!!!!!!? wrote: »

Are you complaining about the fact that sub-prime lending exists at all or just the recent massive increase in the cost of obtaining sub-prime deals?

Not a compliant, just an observation of how I felt when I saw the balance sheet.

I still don't see how having bad credit is in any way helped by being dumped with poor deals. With the insurance bought by the borrower to cover the lender in case of short falls on reposession, I don't see why they should get a poor deal.

Spamreported

why the broker is getting a large proc fee and charging a fee as well I do not know. mortgage advisers are hardly in the solicitors league of charges and intelligence/training.

minimike2

Im talking about the proc fee only, most networks dont take a slice of the broker fee.

Time wise:-

Appointment one, 1 hour, up to 1 hour travel per way = 3 hours
Sourcing and keying = 2 hours
Appointment two, 1-1.5 hours, up to 1 hour travel per way = 3.5 hours
Application processing (most adverse is hand written applications) = 1 hour
Demands and needs and suitability letter = 1.5 hours
Photocopying pay slips, bank statements, ID, certifying = 0.5 hours
Taking app to post office to post to lender = 15 mins

Then the ongoing stuff throught the application, about 3-4 hours of work.

Grand total = 15.75 Hours work that goes into an adverse case. Unless you pay an administrator, then they have to be paid for.
Thats if all goes smoothly too. It can be much higher than this where complications arise or lenders ask for more stuff etc

Brokers charge fees because they need to make a living. Bear in mind some will only sign up one person a week, or maybe even a month. There are costs to pay and unless the broker is directly authorised the monthly costs can be high. At the end of the day its your choice to use either a fee charging or a non fee charging broker.

SR - Your comment is quite offensive. Mortgage broking isnt just shoving someones details into a computer and seeing what comes out then filling out some forms. If I am pondlife in comparison to solicitors and the like then why do I have Solicitors and accountants as clients? Surely they can do it themeselves? Do you have CeMAP? If not then I challenge you to study for it and pass your exams in three months, then come back and tell me we arent trained or intelligent.

dekh

Thanks for that.

How many hours to do a non-adverse case?

Kez100

dekh wrote: »

I would say that's a bit simplistic, how quickly can a property be sold in the current property climate? Assume there is little equity in the property so the seller has to break even to clear the current mortgage.

It's not simplistic.

If there is no equity in the property they wouldn't be remortgaging to raise equity to pay someone off. So, your assumption there is little equity is a bad assumption.

If the property can't be sold quickly then, hey, the person wanting to leave will have to wait, won't they. That's the market. They own property (both of them) and the property market is slow and falling.

minimike2

Non adverse a lot less.

Maybe half the time?

I dont know many brokers that charge a fee on non-adverse cases though