But the fee has to be reasonable. Let’s face it we are not talking about a lengthy or difficult process here.So when I heard that First Direct was dropping the fees on its offset mortgages I cheered loudly. Only to stop cheering and start stamping my feet in frustration when I saw that it was just another short-term stunt to grab a few new punters rather than a sudden realisation that the whole fee structure of mortgages is based on shameless profiteering. I’ve made this argument before and it still stands. Lenders claim that mortgage fees represent the costs incurred by them but that cannot be true if the fees can be dropped on a seasonal whim to spice up competition. Either they represent a legitimate expense that needs to be recovered by lenders or they do not. If they are legitimate, how come there is such a wide discrepancy between what is charged by the cheapest lender and what is charged by the most expensive? And again, if they are leg- itimate, how is it that lenders can afford to axe them as a marketing ploy? First Direct is not the first lender to do this, Intelligent Fin-ance dropped its fees for a few months earlier this year. Let’s look at lenders’ costs in a bit more detail. First Direct – which claims to be this country’s most recommended bank – is offer- ing its variable rate offset mortgage free of arrangement and application fees, giving customers a saving of up to 599. That’s a fortune. You’d have to work 119 hours to earn that before tax on the minimum wage. First Direct might think it is being generous deducting the fees from applications made before July 12 and completing by September 30, but it should be ashamed that it has been regularly fleecing its customers of this cash. What exactly do clients get for their dough? Apparently a 299 arrangement fee and 300 external valuation fee. Most valuations are now desktop or drive-by – they take five minutes as someone ticks the right boxes on the paperwork. For 300 you could do a drive-by valuation while supping champagne in a chauffeur-driven limo. The 299 arrangement fee is also a joke. For that clients should get a gold plated Key Facts Illustration thrown in. The Office of Fair Trading could not get banks to properly justify the 20 or 25 they charged for late credit card payments and surprise, surprise the penalties have suddenly fallen to 12 to kill off that inquiry. Perhaps the OFT should turn its attention to mortgage fees now that it has won the credit card battle and see how quickly lenders chop these in half to avoid further scrutiny.
- Top trends
Bradford & Bingley is returning to the lending market for the first time in five years with a new mortgage aimed at the first-time buyer market.The Professional FTB mortgage is aimed at young professionals who are looking to buy their first home but are still under a training contract and studying to pass their professional […]
Propertyfinder.com says England football fans should avoid hanging English flags outside their homes if they want to sell during the World Cup. Its says women and wealthier buyers are far more likely to disapprove of homes sporting flags. Warren Bright, chief executive officer of propertyfinder.com, says: “If you have your house on the market and […]
em-, is holding a roundtable events on July 12 at the St Davids Hotel & Spa in Cardiff.The Cardiff event will focus on em-s varied offering and will give brokers the opportunity to find out how they can improve their revenue streams not only via the offer of free valuations and no application fees across […]
Niche Mortgage Solutions is the latest member of the Professional Mortgage Packagers Alliance. Based near Reading, Niche has nationwide broker coverage and three franchise offices in St Albans, Wisbech and Edinburgh.
Smart utility metering; fitness trackers; connected cars; smart factories; precision agriculture: the internet of things encompasses myriad applications. But how do you gain exposure – and profit – from this growing trend, asks Neptune fund manager & CTO Ali Unwin. Read more: Important information Investment risks Neptune funds may have a high historic volatility rating […]
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