Have you been stung by fees when arranging a mortgage?

Thanks for your support Malcolm. The cost of the fees is one of the things we’re looking at – ensuring that additional fees reflect lenders’ actual costs.

It’s interesting to hear your feedback on the website too (that’s the part of our campaigns I tend to look after). When we launched the site we ran some focus groups to work out how people wanted information presented to them and what level of detail they required.

On the whole people asked for a simplified version of the campaign upfront and the option to dig in the detail if they were interested in finding out more. That’s the idea behind the ‘Get involved’ and ‘Know the issue’ sections.

There’s some information on ‘Know the issue’ on our campaign asks, and the specifics per financial product/service in here http://www.which.co.uk/campaigns/insurance-bank-card-fees/know-the-issue/. We always welcome feedback on this though and if you ever feel we’ve over simplified, or you’d like a little more detail, please do let us know. Many thanks, Charlotte

Charlotte, thanks for the response. I did look at the “know the issue” site. The mission statement sort of sums up the approach:
“Two thirds of us think that companies use fees or charges to trick us into thinking that the cost is cheaper than it is. We’re calling for all financial fees and charges to be upfront, fair and easy to compare. We want companies to take action and the Government and regulator to conduct a thorough review.”

This is fine – we all want (I assume) to have total clarity in what we will be paying. What I was concerned with was that the charges that will be made are justified. I would like to see explanations for both the need tp impose and the level of these charges (or arguments to show the charges are not justified) and if we are criticising an industry, they should be asked to submit their side of the story. Then we can hopefully see whether there is a “case to answer”.

I would campaign to remove vat from household energy – it is a vital commodity like food and housing. I would expect considerable support. But, at the same time, I should be asking “and where would you like the lost tax revenue to be replaced from” (excluding “not from me” as a reply! 🙂 . In other words, we need to look at a slightly wider picture to reach a sensible conclusion, don’t we?

Is it the case, Jill, that the client would usually be better off even after allowing for the financial adviser’s fee charge or the commission paid by the lender, given that the arrangement etc fees will still be levied albeit the adviser recommends the most favourable bundle?

I consider the computerised comparison of fees payable is the least significant element in giving good mortgage advice as [1] an understanding of the client’s needs and their financial situation, and [2] the competent assessment of suitability of the loan for the client’s needs and financial profile, are far more important and fully justify the adviser’s fee. For that reason I would press for this magic software to be made freely available in the public domain, and I should be interested to hear why it should not be. Perhaps there are risks in letting the public have access to this data, in which case I think we should be told what they are.

This has always been a bone of contention. It came up again in the Conversations about estate agents. The theory, advanced by the fee earners, is that as house prices rise the percentage fee level falls. They must think we were born yesterday to swallow that.

I wonder who had the nerve to introduce “arrangement fees” – they did not exist when I first became a mortgagor. Once the first lender was seen to get away with it the others swiftly followed, such was the inelasticity of demand at that moment. Now we are stuck with it and even more dubious imposts have quietly crept into the transaction. Of course, all the costs were always there but they were hidden and wrapped up in the overall interest rate. If interests rise again, will the added fees diminish? I doubt it somehow. The professionals call it “transparency”.