You are here: Home - Mortgages - First Time Buyer - News -

Brits waste millions on unnecessary mortgage advice fees

0
Written by: YourMoney.com
19/09/2017
UK home buyers are wasting a total of £370m a year on unnecessary ‘advice fees’ but the 'double-dipping' claim has been labelled as 'sensationalist'.

Independent broker One 77 Mortgage has stated that despite the fact that all brokers receive a procuration fee from lenders for their work in arranging mortgages, an extra charge for ‘advice’ is levied on customers in approximately 75% of purchases — a practice it referred to as ‘double-dipping’.

It said that an additional fee, averaging £400, was ‘slapped on’ 926,220 of the 1,234,960 residential property transactions completed last year, setting consumers back a total of £370,488,000. One 77 also argued that many consumers don’t realise that mortgage broker ‘advice fees’ are not mandatory and they could save an average of £400 each by shopping around.

One 77 Mortgages confirmed it only takes the procuration fee paid by the lender, and its managing director, Alistair McKee, said: “It’s truly shocking that brokers are double-dipping on fees in this way and stinging the consumer in the process. This is a colossal sum of money that’s being thrown away unnecessarily, in many cases by the people who can least afford it.”

Richard Bousfield, managing director of The Surrey Mortgage broker, told YourMoney.com’s sister title, Mortgage Solutions: “I think the way up-front fees have been characterised as ‘double-dipping’ is quite frankly sensationalist. I do charge a fee of £395 which is invoiced when the customer applies for a mortgage. I’m quite transparent to customers about this and as a professional, I deliver a good service. If people don’t want to pay the fee they are free to go elsewhere.

”There’s a lot of work involved these days in arranging a mortgage and this fee justifies my time. It should also be made clear that not all applications go through, yet I will still have done the same amount of work.”

However, in response, McKee said: “The issue of administration is a bit of a distraction. A lot of companies feel they need to charge additional fees because they are uncompetitive and have high overheads. But administrative overheads are a fact of life and we control ours tightly to remain competitive.”

David Hollingworth of London and Country, added: “We are the UK’s largest fee-free mortgage broker and have never charged a fee. Our customers clearly value the fact that we don’t charge them a broker fee in addition to receiving the procuration fee from the lender. Providing advice from across the market without a cost to them is something that brings customers back to us time and time again. 

“Just as with any other fee, borrowers need to factor in broker fees to their assessment of what will provide the best overall value for them.  Some may be happy to pay a fee but for advice to be readily available to as many borrowers as possible, we think a no-fee proposition remains crucial.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2279073-mobile-banking
Increased scrutiny fails to dent unarranged overdraft fees

In spite of growing criticism from consumer and regulatory bodies, unarranged overdraft fees are little changed since the start of...

Close