MBE19: All bridging lenders should publish their fees
All bridging lenders, whether regulated or unregulated, should publish their fees on their website, Scott Marshall, managing director of Roma Finance, has claimed.
Marshall said: “It’s incumbent on a lender to publish their fees on their website, whether regulated or unregaled. Your issuing AIPs should be clear and transparent.
“This is so the customer has full knowledge of what they’re entering into before it reaches the legal stage.
“And it’s as important the customer does due diligence on their lender as the lender does on the customer.”
Mike Underwood, sales director at Bridging VAT, said that lenders need to work with brokers to make it easier to compare like for like fees due to the difficulties involved.
He added: “From a lender point of view we believe in transparency and higher standards in the industry. That transparency needs to extend to upfront phishing rates.
“Some of these rates are fishing hooks for the client and only achieved for the small minority.
“We have to understand the customer is at the heart of the transaction. It is not up to the lender to take as much money out of it as they can and leave the customer high and dry.
“It’s how the lender the lender treats that customer if something untoward happens during the loan.”
Kay Williams, regional sales director for the North of England at Ultimate Finance, added: “There are a lot of headline rates.
“At some point going forward it’ll be good having standardised forms where you can compare fees like for like.
“I think fees are very important. The documentation needs to be absolutely clear of any fees for the client, but the broker needs to explain the fees in a user-friendly way.
“Once the client signs it with the solicitor that should be discussed again. There should be three stages.”
Paul Darwin, consultant at Blacks Solicitor, said that the key for the customers is the advice they get and the transparency of the deal.
He said he believes fees should be fair, proportionate and reflect the lender’s costs.
Darwin went onto add how important it is that fees are explained in a clear way that customers understand.
He added: “Sometimes I don’t think we do ourselves any favours using the variety of fees which come to the form.
“We all know and appreciate it’s a competitive market out there and lenders need to differentiate themselves often by rate and fee but when it comes to the naming of the fee such as an application fee, we understand it but sometimes it’s worth checking with the customer that they know what it means too.”