Valuations costing a fortune through mortgage companies
February 20, 2008
Many mortgage companies are charging fees that are way over the top for valuations according to a recent report, and this is despite the fact that many of the customers are not moving home but are simply switching mortgages to another lender. It is thought by many that this is one of a number of tactics used by mortgage lenders in order to get extra money out of customers, along with the extortionate fees that many charge when taking out a mortgage loan – an issue that has been at the centre of controversy over recent months.
According to recent reports some customers are being charged up to a thousand pounds for one of these valuations, yet in some cases the cost of the valuation to the mortgage lender is as little as twenty pounds, reflecting the extortionate mark up that mortgage companies are often applying to these loans. Amongst the controversial points relating to these mortgages is that in some cases the valuation is carried out on a ‘drive by’ basis, where the surveyor simply carried out the valuation based on the outside of the property.
According to officials from the Council of Mortgage Lenders, many of these valuations are automated, and this means that the valuation is in part based upon the type of property, the size of property, and the area in which the property is located. However, despite this customers are still having to pay sky high fees even though the mortgage company has to carry out minimal work for the valuation.
There is also controversy over mortgage companies that insist on carrying out a valuation even where the borrower is simply switching mortgages – this does not do the borrower any good as they already live in the property yet it still mean them having to pay out more money unnecessarily.
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