Buying a Home in UK
This section details the potential scams and unethical practices
to beware
of when buying a property in the UK.
Categories in section: Buying a Home in UK
| Viewings to Offer | Offer to Completion |
| Title: | Scam rating: |
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Agent continues to conduct viewings after offer is accepted
Who is the Rogue?:
Seller
How does it work?: Even after your offer is accepted, the Estate Agent may continue to market the property to the highest bidder. Usually the seller requests this specifically if he has low confidence that the buyer will complete the transaction or simply wishes to get a higher/stronger offer from someone else. The major risk is that the buyers gets gazumped after spending money for surveys and conveyancing. How to avoid this scam?: It's difficult to avoid this unethical practice happening as an offer is not legally binding. The Seller is within his right to continue marketing the property until exchange of contracts. Most honest sellers / estate agents will take the house off the market once valuation has been instructed and stop further viewings. |
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Mortgage company forces me to take out their own insurance cover
Who is the Rogue?:
Mortgage
How does it work?: It is illegal for a mortgage company or an estate agent to force you to buy their Building insurance along with their mortgage. Many however give you a strong impression that it is within your best interest to do so. The implication being that they will find a reason to reject your mortgage application if you fail to comply with their wishes. Some lenders will also offer you some very expensive mortgage payment protection insurance (MPPI), which will cover you for accident, sickness or unemployment (ASU). How to avoid this scam?: To keep the lender sweet, tell them you'll be willing to consider a quote from them. But always reject their offers out of hand and take independent financial advice to get a better deal elsewhere. Make sure you check all the caveats on a mortgage payment protection policy. In most cases, these insurances are a complete ripoff especially as the lender usually finds some excuse to not pay out. |
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Mortgage failed to disclose high hidden costs
Who is the Rogue?:
Mortgage
How does it work?: Mortgage companies are notorious for enticing customers with headline grabbing low interest rates. If planning a mortgage, you need to be aware of other hidden or unexpected fees that creep in and provide the profit for the mortgage company. In particular, watch out for the following usual suspects: Arrangement fees, Exit fees, Extended tie ins periods, mortgage advisor fees, high valuation costs, higher lender charges and charging interest at month end. How to avoid this scam?: Make sure you read the small print carefully in the mortgage agreement and look out for the hidden charges or unexpected tie ins. Engage the services of a trusted independent mortgage advisor to help you decipher the different financial products and determine which one best meets your specific needs. |
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