Bad Credit Mortgage Upfront Fees
We are often asked the same question from our clients. Should I pay an upfront fee for a mortgage application if you have a bad credit history?
The answer is not always obvious, when you are desperate to remortgage or secure a mortgage on a new property it can be tempting to rush in and end up regretting paying a large upfront fee with no guarantee of a mortgage offer.
When working out if you should pay an upfront fee you should always ask 2 basic questions before parting with you if hard earned money
1) Is the fee a reasonable? A fee of under £200 is fairly normal within the industry. If they are charging over £500 you may question if it is reasonable, especially without a prior agreement in principle.
2) Is the fee refundable if the mortgage does not proceed or is declined? Personally, it would ring alarm bells if the upfront fee is non-refundable. We have had lots of clients come to us after they have lost an upfront fee of over £500 to a broker who has failed to secure them a mortgage.
Our advice would be to use a comment sense approach, if it seems high or non-refundable then it might be worth getting a second opinion. Most reputable mortgage brokers publish their fee tariffs on their website. If you have any concerns get a comparison quote from another mortgage broker.
At Plus Financial Solutions, only change a £150 fee on a full application after your mortgage has been agreed in principle. Our upfront fee is also fully refunded if your mortgage is declined.