Booking Fees.

dunstonh

I'm not sure about the legal position but this can't possibly be fair. In the absence of proper legal redress perhaps we could start some kind of support group?

Why cant it be fair?

trudiha

dunstonh wrote: »

Why cant it be fair?

*packs up irony, takes it, far, far away, where it will be appreciated.*

scutter

I am taking the mortgage with kent reliance. I am going direct through them and not a FA.

They will be making £125000 of me in the next 25 years but they want to charge me £995 to set up my mortgage. If i buy an other product there is no booking fee so why am I being charged this amount of money?

Also for all of the Sarky comments, thanks alot I came on here to ask a question as i do not know the answer. I thought that was the whole point of this site

Gary

homer_j_3

After a certain period you will not be tied to them so to say that they will make 125,000 off you will not be correct, if you use this site and remortgage everytime your deal comes to an end.

The reason that other deals will not charge will be because the rates are higher or maybe because the volume in lending of a larger lender has meant they have been able to borrow at a lower cost/rate.

Ultimately, the lender will price the deal based on the fact that you will only stay with them whilst the deal is there.

As you are not using an adviser, I would state that rather than looking at initial costs, look at overall cost. This means adding up the total amount you will pay over the initial benefiting rate and potentially over the whole term.

Normally, larger mortgages are better placed with products with larger fees attached which look very ugly with smaller mortgages.

scutter

I am taking a 25 year fixed rate at 5.75%. It si not the money that is the problem as it only work out to 6 weeks mortgage payment.

I just can't work out why it cost £995 for one product and £60 for another. It just seems like profiteering from the banks:mad::mad:

Markyt

trudiha wrote: »

I'm not sure about the legal position but this can't possibly be fair.

It's fair - you have the option to take it or leave it. There are even products which don't have booking fees - have you noticed the rates on those?

Markyt

scutter wrote: »

I just can't work out why it cost £995 for one product and £60 for another. It just seems like profiteering from the banks:mad::mad:

The margins will be the same, pretty much, for any given lender with fee free and fee charged products, when you calculate the rate difference.

Tiddler_2

Gary,

It's not profiteering though the fee is charged to help the banks to make a profit, if that makes sense.

When deciding on an interest rate to charge a customer the mortgage companies look at the interest rate at which they can either borrow the money themselves, or the rates at which they would have to pay their savers. They then decide the interest rate at which they will make an acceptable profit.

In order to make the rate appear more appealing the mortgage company then decides to lower the interest rate that you would be charge (this is known as a headline rate) in order to fund this reduction in the rate they charge a fee - in your case £995.

It would be a lot easier to compare products if none of them charged a fee, so we were just working off interest rates, but it wouldn't be as much fun then would it!!

Checking their website, the rate you quote seems to relate to a 25 year fixed rate - I would be careful doing this as whilst it gives you the peace of mind in that your mortgage payment will never go up, it also restricts your options should your circumstances change in the future, due to Early Repayment Charges (penalties).

Dan_Collins_2

Seriously guys, would you work for nothing? We all work to make profit and you have to way things up. If you dont want to pay a fee you will pay in interest, because money has been cheap for so long we have to pay for it big time now.

Solicitors are making less and less for the work they do per case, hense service is @@@@ and as for estate agents, people dont mind paying them 3k to put a board up and then wait for the buyer to find the property on right move (£350-£400 a month thank you very much) but they wont pay a solicitor £800 or a lender £999?!?!

If you had no choice but to pay £999 then I think it may be a little unfair, but you dont have to take that mortgage!

Also how are you getting on with Kent Reliant? I find the indian call centre service to be really poor but they have some good deals.

dunstonh

They will be making £125000 of me in the next 25 years but they want to charge me £995 to set up my mortgage. If i buy an other product there is no booking fee so why am I being charged this amount of money?

Thats your first mistake. They will not be making £125,000 out of you. They have to borrow that money themselves to lend to you. That will either mean paying savers interest or going to the markets to borrow.

With fixed rate mortgages, there is often not a penny made on the actual mortgage with the whole profit tied up in the arrangement fee.

If i buy an other product there is no booking fee so why am I being charged this amount of money?

Because the profit will be in the interest rate charged. There will be a margin for them there.