Decision in principle fees

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This topic contains 1 reply, has 2 voices, and was last updated by  Mark Stücklin 3 days, 11 hours ago.

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  • #222085

    marconi44
    Participant

    I am looking to buy a property in Spain with a mortgage. The broker to whom I was introduced has indicated that, in order to obtain a decision in principle from one of the panel of banks with which he works, a €600 upfront fee is payable.

    This seems odd to me – in the UK a DiP is free and I don’t see how you can have to pay over this sum when potentially the decision could go against you. You have then spent €600 on nothing at all! And even if the borrowing decision is in your favour, you only get the benefit of the upfront fee if you then proceed with the mortgage for which you have a DiP, at which point the fee is deducted from your product fee.

    Is the experience of other buyers the same? Or is my scepticism justified such that I should seek another Broker?

  • #222110

    Mark Stücklin
    Keymaster

    It doesn’t cost you anything to get a binding mortgage offer from a bank in Spain, although you will have to pay for the valuation or tasación. The €600 you mention sounds to me like the broker’s upfront fee, not a bank fee. To my mind it’s not unreasonable for brokers to charge something up front as they have to do work up front to arrange your application.

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