Keep An Eye On These 5 Fees When Remortgaging, Don't Let Them Spiral Out Of Control
If you are looking to save money on your mortgage, remortgaging is a great way to do it. As well as taking advantage of a low rate mortgage deal, it is also a good way to access extra funds for debt consolidation and much needed home improvements.
But many people forget that there may be fees involved with a remortgage, meaning that you may not save as much money as you may have initially thought. Yes, the interest rate may be lower but you do need to take into account what the end cost will be with all fees added on top. So what fees do you need to consider?
Mortgage Advice Costs: It is advisable to use the services of a mortgage adviser; however you should be aware that there is a cost involved for this. Some advisers will be paid by way of commission direct from the lender, and in that case you may not have to pay any fees upfront, however some may prefer to be paid by way of a fee.
Of course, surveyors do not work for free. Depending on the value of your home and the complexity of the survey involved, a valuation report can cost from £200 to over £1,000. If you want a more detailed valuation you could end up having to pay several hundred pounds for this. Many lenders will agree to meet the cost of a basic survey as part of their remortgage deal whilst others will expect you to pay for this. Always check if you're liable for the fee.
Fees for the valuation of your home vary widely, and it will also depend on the type of valuation that you want. If you prefer for a more thorough evaluation, of course the costs involved will be higher. But the benefit of this is that you will be more aware of any potential structural issues with your home.
Lender Arrangement Fees: Many lenders will charge an arrangement fee for setting up your new mortgage, and these vary depending on the lender and the type of product that you opt for. For example, fixed rate mortgage products will often carry a higher arrangement fee than a variable rate mortgage.
Arrangement/Booking Fee: The majority of remortgage deals in the UK have some sort of arrangement or booking fee. These can range from around £300 to a percentage of the amount that you borrow. An arrangement fee is generally linked to a specific fixed or discounted/tracker deal and is either payable on completion or added to the mortgage.
Booking fees are often payable when your remortgage application is submitted. If your remortgage application is declined or you decide not to proceed, you may not get a refund of your booking fee.
Legal Fees: Even though you are not moving home, a remortgage involves a certain amount of legal work. So, a conveyancer has to be employed to deal with the Land Registry and to obtain local searches. The solicitor can be appointed either by the lender or by you.
Most remortgage offer free legal work as standard; however there are instances where this is not always applicable. For example, if there is additional legal work to undertake such as the transfer of the property into joint names, then there might well be additional charges for this type of work.
About the Author
Timothy Frodsham writes for http://JustRemortgages.com one of the UK's top sites for the latest remortgage rates and best remortgage deals.
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