When did a 'Booking Fee' apply to a Mortgage?
01 March 2009, 10:57 PM
#1
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When did a 'Booking Fee' apply to a Mortgage?
WTF????
Booking Fee
+
Valuation Fee
+
Solicitor Fee
+
Arrangement Fee
In my day there was ONE charge, which was the Valuation Fee. The Solicitor didn't charge for acting on behalf of the lender and as for Arrangement Fees of £500+ (some £1,000's) and Booking Fees of £150 - it's a bloody disgrace!!
Why do you youngsters accept all this Rip-Off?
Booking Fee
+
Valuation Fee
+
Solicitor Fee
+
Arrangement Fee
In my day there was ONE charge, which was the Valuation Fee. The Solicitor didn't charge for acting on behalf of the lender and as for Arrangement Fees of £500+ (some £1,000's) and Booking Fees of £150 - it's a bloody disgrace!!
Why do you youngsters accept all this Rip-Off?
Last edited by SunnySideUp; 01 March 2009 at 10:58 PM.
02 March 2009, 08:33 AM
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I doubt there is any choice but to accept them if you want to have a mortgage at the end of the day they are what they are, one way or another you lose the bank wins....usually 
02 March 2009, 08:45 AM
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Yes, I appreciate that to get a Mortgage then these must be paid .... if there is no competition.
But, how did we allow them to come about? Especially when there was heavy competition to lend money?
But, how did we allow them to come about? Especially when there was heavy competition to lend money?
02 March 2009, 09:08 AM
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They rely on people being desperate for the low rate irrespective of the cost involved. When they quote £1999 arrangement fee they know the people looking at this product are desperate for the low rate and they know the £1999 will most likely be stuffed onto the end of the mortgage loan.
The most obvious issue is that you get three products - the first will be say 4.19 fixed for 2 years with a 549 arrangement fee - not too bad. The second is 2 year fixed at 4.89 with a £99 arangement fee. On £100K the interest on both is 4190 and 4890 respectively. Over the 2 year deal you save money going for the low rate, high fee.
However, mortgage lenders know some people just want the lowest rate possible and heck to anything else. So they offer a 3.89 with £1999 arrangement fee. Again if its fixed for 2 years the interest is 3890 BUT its actually cost you £999 going for the cheapest rate and they know that once you get over £500 people will nearly always stuff the fee on top of the mortgage and therefore increase their lending even more.
Arrangement fees were never this high. The lenders got greedy the more people tried to punch above their weight and buy something they couldn't afford. Now though, although people are a bit more prudent in what they can afford to buy there are those who are again desperate to remortgage and so the fees will remain - for now.
The most obvious issue is that you get three products - the first will be say 4.19 fixed for 2 years with a 549 arrangement fee - not too bad. The second is 2 year fixed at 4.89 with a £99 arangement fee. On £100K the interest on both is 4190 and 4890 respectively. Over the 2 year deal you save money going for the low rate, high fee.
However, mortgage lenders know some people just want the lowest rate possible and heck to anything else. So they offer a 3.89 with £1999 arrangement fee. Again if its fixed for 2 years the interest is 3890 BUT its actually cost you £999 going for the cheapest rate and they know that once you get over £500 people will nearly always stuff the fee on top of the mortgage and therefore increase their lending even more.
Arrangement fees were never this high. The lenders got greedy the more people tried to punch above their weight and buy something they couldn't afford. Now though, although people are a bit more prudent in what they can afford to buy there are those who are again desperate to remortgage and so the fees will remain - for now.
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02 March 2009, 06:13 PM
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WTF????
Booking Fee
+
Valuation Fee
+
Solicitor Fee
+
Arrangement Fee
In my day there was ONE charge, which was the Valuation Fee. The Solicitor didn't charge for acting on behalf of the lender and as for Arrangement Fees of £500+ (some £1,000's) and Booking Fees of £150 - it's a bloody disgrace!!
Why do you youngsters accept all this Rip-Off?
Booking Fee
+
Valuation Fee
+
Solicitor Fee
+
Arrangement Fee
In my day there was ONE charge, which was the Valuation Fee. The Solicitor didn't charge for acting on behalf of the lender and as for Arrangement Fees of £500+ (some £1,000's) and Booking Fees of £150 - it's a bloody disgrace!!
Why do you youngsters accept all this Rip-Off?
We don't, that's one of the reasons the number of first time buyers has fallen
If you think about it everyone involved in the sale of a house benefits from higher prices. The estate agent gets more comission, the mortgage broker gets more comission, the lender gets more interest and the seller gets more money from the sale.
Think people have finally realised that!
03 March 2009, 08:48 AM
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The Estate Agent only gets more commission if his %age remains the same. When we moved 7 years ago we paid 1.25%. Nowadays they would just charge 2% to cover the same costs.
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