Home Loans – Warning Against Mortgage Application Fees

Home Loan News:

Nedbank have recently issued a warning to consumers about being forced to pay home loan application fees to a third party such as an Estate Agency, Broker or Mortgage Originator.

Nedbank generally regards most intermediaries, such as originators, estate agents and brokers, as valued business partners who are authorised to negotiate with banks on behalf of home loan applicants. Although, the Bank has become aware that some operators are engaging in practices that are not in consumers’ best interests.

Speaking to Persfin.co.za, managing director of Nedbank Home Loans, June Tudhope said: ‘Nedbank does not condone the practice of charging clients an application fee’.

Tudhope says Nedbank was made aware of a company in Johannesburg that has been charging clients for processing home loan applications. The company forwards applications to banks and charges a raising fee for this service.

Generally banks maintain contractual agreements with third-party companies such as Mortgage SA, Best Bond and IBO Home Loans. These Mortgage Originators are paid in the form of commission, by the bank, for every successful home loan application, and clients are thus protected from any costs until they accept a home loan.

Tudhope added that Nedbank does not charge clients or third-party applicants any fees for applications for a new or further loan, under any circumstances.

“We urge consumers to be vigilant when looking for sa home loan finance, particularly where they are required to sign contracts that bind them to any form of payment,” she says.

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