Ray CohenI am intrigued by the debate on retention products. If the loan was non- regulated at the start of the term, why should switching to a different rate make it regulated? For those who wish to make it a regulated loan, the answer is simple – change the contract. The options are to remortgage elsewhere or to remortgage to the same lender. There will be some legal costs but it’s reasonable to think the lender will dispense with survey and searches, thus reducing the cost. Any lenders willing to make this offer? But is it worth it for the client? The advantage for the broker is clear – another proc fee. Could this be a mis-selling scandal in the making? Sue Read wrote a couple of weeks ago of her desire to get a fee from lenders for advising clients to stay where they are rather than re-mortgage, as she found it hard to justify charging the cost of this advice. The FSA is keen to make customers aware advice is not free and they have to pay for it some way or other. Why should a lender which has already paid the cost of winning new business have to pay a broker to keep it when it already offers the customer the best deal? Any payments to the intermediary are costed back to the customer. If her service offering is to regularly review the market to see if there is a better deal, the customer who signs up for this should pay for it. This is what being a professional is all about. Asking the lender to pay a retention fee is just a way of hiding cost as the client effectively pays in the end. Ray Cohen Director Jackson Cohen Associates By email
- Top trends
You are probably aware by now of the recent product launches from Just Retirement and Prudential. But it is wise not to let the headlines distract us from considering the overall structures of the products.
Mortgage Options, the Independent mortgage broker, is extending its franchise package for brokers thinking of going it alone and setting up their own mortgage shop.The mortgage shop franchise package provides brokers with the opportunity to have total day to day responsibility while benefiting from working within a proven business environment, with all the cost savings […]
Portman is revising its five-year fixed rate mortgage.The five-year fixed rate, currently at 4.45%, will be amended to 4.54%. There will be a 499 acceptance fee, up to 95% LTV, no higher lending charge up to 90%, a facility to make part repayments of up to 5% of the loan amount borrowed without incurring an […]
Complete Mortgage & Loan Services is offering a full refund of its application fee on all sub-prime packaged cases submitted between October 17 and December 31 2005. Tristan Pile, head of sales and marketing at CMLS, says: “We are delighted to announce this time-limited offer of full application fee refunds, payable on completion of all […]
Steve Webb – Director of Policy and External Communications As the Autumn Statement approaches, Steve Webb calls for the Government to stop tinkering with tax relief. Twice a year, in the run-up to the Spring Budget and the Autumn Statement, we face a torrent of speculation as to what changes the Chancellor might make to […]
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