Feels like pressure from broker - Right to Buy

AliceBanned

rdsmortgageman wrote: »

You should not be paying £2.5k in broker fees. Is he refunding the procuration fee to you?

No - do you mean the arrangement fee? This is £999. Thanks for your help.

rdsmortgageman

AliceBanned wrote: »

No - do you mean the arrangement fee? This is £999. Thanks for your help.

No. The broker will be paid by the lender for introducing business to them. If he is charging you a fee of 2.5k, he should refund what he is being paid by the lender. I can't imagine how he can justify a 2.5k fee under TCF.

AliceBanned

rdsmortgageman wrote: »

No. The broker will be paid by the lender for introducing business to them. If he is charging you a fee of 2.5k, he should refund what he is being paid by the lender. I can't imagine how he can justify a 2.5k fee under TCF.

I am not sure whether he is being paid by the lender. There is no mention of this. Sorry, what is TCF?

I thought perhaps the mortage was more guaranteed to go ahead through this broker, as inferred this in a previous telephone conversation. However he now said he can't promise anything - obviously - but I might be willing to pay a fee if it got pushed through; I am running out of time on the right to buy timescale - got about six weeks left. The whole thing feels like a nightmare but it shouldn't! When i asked him about the "guarantee" which he mentioned, he just replied that he couldn't guarantee anything but he wouldn't waste his, mine and his company's time!! I thought this a bit cheeky because frankly i am just trying to find out what I get for the £2.5k, and to get a clear picture.

Ian_Griffiths_Halifax

rdsmortgageman wrote: »

No. The broker will be paid by the lender for introducing business to them. If he is charging you a fee of 2.5k, he should refund what he is being paid by the lender. I can't imagine how he can justify a 2.5k fee under TCF.

You are wrong. He doesn't have to refund what he is being paid by the lender, he is probably just charging an extortionate rate and keeping the procuration fee as well. These companies don't seem to have any morals.

silvercar

TCF=treating customers fairly. Basically guidelines from the financial ombudsman on how business should be conducted.

I'm not a mortgage broker, but I would have thought it unlikely that the ombudsman would get involved on actual fee levels; more likely they would say that a broker has to make clear the charges and fees.

rdsmortgageman

Treating Customers Fairly is an initiative being introduced by the FSA. Firms have got to be able to prove that they are treating customers fairly, including charging of fees.

If it is a right to buy, he is probably only getting paid a small amount from the lender, however, there is no way that he can justify charging you a £2.5k fee (unless he is using his helicopter to do a home visit!).

I would suggest you find a reputable adviser in your area. Expect to pay a fee, but anymore than £500 is being greedy and ripping you off. If normal credit circumstances, a Right to Buy is easy to do.

If I were you, I would go to another broker.

rdsmortgageman

Ian_Griffiths_Halifax wrote: »

You are wrong. He doesn't have to refund what he is being paid by the lender, he is probably just charging an extortionate rate and keeping the procuration fee as well. These companies don't seem to have any morals.

Wasn't saying he has to officially, but morally he should. Don't know how some folk sleep at night!

Ian_Griffiths_Halifax

AliceBanned. Pick up the phone and speak to some local brokers. Your house type may cause some lenders a bit of a problem and your credit history may also, but paying £2500 to a broker who you are already having doubts about before you even write out the application, is just nuts.

You doubt his honesty and you've been told that you can get the service for less, so do something about it. The deadline for the Right to Buy to complete by, can often be extended if the solicitor can convince the Council that it won't take much longer.

I haven't had time to ready the whole thread this morning, but I bet the broker was even going to get you to use solicitors that he recommends.

While this isn't a bad thing, (we do it our selves and take no commission from the solicitors in order to keep the cost down for the client and encourage them to use them), this sort of company would probably be using a solicitor who pays them a fair bit for the introduction.

With respect, this guy sees you as a thick or vulnerable council tenant who doesn't know any better and is trying to cash in on you. It's been done thousands of times before and it's now thought of as 'the norm' by council right to buyers. You're obviously not thick so prove it to him by using somebody with some scruples.

rdsmortgageman

Ian_Griffiths_Halifax wrote: »

AliceBanned. Pick up the phone and speak to some local brokers. Your house type may cause some lenders a bit of a problem and your credit history may also, but paying £2500 to a broker who you are already having doubts about before you even write out the application, is just nuts.

You doubt his honesty and you've been told that you can get the service for less, so do something about it. The deadline for the Right to Buy to complete by, can often be extended if the solicitor can convince the Council that it won't take much longer.

I haven't had time to ready the whole thread this morning, but I bet the broker was even going to get you to use solicitors that he recommends.

While this isn't a bad thing, (we do it our selves and take no commission from the solicitors in order to keep the cost down for the client and encourage them to use them), this sort of company would probably be using a solicitor who pays them a fair bit for the introduction.

With respect, this guy sees you as a thick or vulnerable council tenant who doesn't know any better and is trying to cash in on you. It's been done thousands of times before and it's now thought of as 'the norm' by council right to buyers. You're obviously not thick so prove it to him by using somebody with some scruples.

Totally Agree

AliceBanned

Ok everyone - your advice has been extremely helpful and my gut feeling is probably right and is confirmed by most of these replies. Shopping around again now...