Five Remortgaging Fees You'll Want To Keep Under Control
- By Howard Ogollegos
- Published 09/21/2011
- Real Estate
- Unrated
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.
When shopping around for a remortgage, it is important that you don't just take the headline interest rate into account. There can be a number of fees and charges involved in the remortgage process and so weighing up the total costs of switching is crucial to maximising your savings. Our guide outlines five common fees that you may encounter when remortgaging.
Valuation Fee: A valuation is a key part of any remortgage. Not only does the new lender have to confirm that your property is worth what you say it is, but they also need to satisfy themselves that there are no structural issues with the property that may affect their security.
However, surveyors have to be paid for undertaking a valuation. Fees for a survey can range from GBP 200 to over GBP 1,000 depending on the size and value of your home - even if a surveyor works for the lender involved. Whilst many lenders will meet the cost of a basic survey as part of the remortgage process, others will insist that you meet this cost. And, if you want to commission a more detailed survey of your home, this could easily cost several hundred pounds.
Broker Fees: The job of an independent mortgage broker is to provide you with advice on the best mortgage product. They have specialist expertise and can also help you manage the paperwork involved in your remortgage. Brokers typically earn their fees in two ways; they receive a fee
from the mortgage provider whilst some will also charge a fee to you directly, typically payable on completion of the remortgage.
Admin Fees to Current Lender: Even if your remortgage lender is offering a fully 'fee free' deal you may still end up paying some charges as part of the process. This is because your current lender might apply some costs. Lenders often charge 'closing' or other administration fees when you redeem your mortgage to cover the costs of them closing your mortgage amount. You'll often see these fees on the redemption statement you receive from your current lender.
Arrangement/Booking Fee: The majority of remortgage deals in the UK have some sort of arrangement or booking fee. These can range from around GBP 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.
Whilst booking fees can often be lower than arrangement fees they are often no-refundable. A booking fee will normally be payable by cheque or credit/debit card when you submit your remortgage application to the lender.
Conveyancing & Legal Fees: Conveyancing is the term used for a solicitor's role in the mortgage lending process. The solicitor deals with all of the legal aspects of the remortgage, including dealing with Stamp Duty Land Tax if applicable, land registry and checking that the ownership of the property is legal and valid.
Whilst many lenders will meet the cost of the basic remortgage legal work, others may require you to pay these fees. Indeed, if there is any additional legal work to be carried out - for example a second charge to be postponed or a transfer of equity - you are likely to have to pay for this.
When shopping around for a remortgage, it is important that you don't just take the headline interest rate into account. There can be a number of fees and charges involved in the remortgage process and so weighing up the total costs of switching is crucial to maximising your savings. Our guide outlines five common fees that you may encounter when remortgaging.
Valuation Fee: A valuation is a key part of any remortgage. Not only does the new lender have to confirm that your property is worth what you say it is, but they also need to satisfy themselves that there are no structural issues with the property that may affect their security.
However, surveyors have to be paid for undertaking a valuation. Fees for a survey can range from GBP 200 to over GBP 1,000 depending on the size and value of your home - even if a surveyor works for the lender involved. Whilst many lenders will meet the cost of a basic survey as part of the remortgage process, others will insist that you meet this cost. And, if you want to commission a more detailed survey of your home, this could easily cost several hundred pounds.
Broker Fees: The job of an independent mortgage broker is to provide you with advice on the best mortgage product. They have specialist expertise and can also help you manage the paperwork involved in your remortgage. Brokers typically earn their fees in two ways; they receive a fee
Admin Fees to Current Lender: Even if your remortgage lender is offering a fully 'fee free' deal you may still end up paying some charges as part of the process. This is because your current lender might apply some costs. Lenders often charge 'closing' or other administration fees when you redeem your mortgage to cover the costs of them closing your mortgage amount. You'll often see these fees on the redemption statement you receive from your current lender.
Arrangement/Booking Fee: The majority of remortgage deals in the UK have some sort of arrangement or booking fee. These can range from around GBP 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.
Whilst booking fees can often be lower than arrangement fees they are often no-refundable. A booking fee will normally be payable by cheque or credit/debit card when you submit your remortgage application to the lender.
Conveyancing & Legal Fees: Conveyancing is the term used for a solicitor's role in the mortgage lending process. The solicitor deals with all of the legal aspects of the remortgage, including dealing with Stamp Duty Land Tax if applicable, land registry and checking that the ownership of the property is legal and valid.
Whilst many lenders will meet the cost of the basic remortgage legal work, others may require you to pay these fees. Indeed, if there is any additional legal work to be carried out - for example a second charge to be postponed or a transfer of equity - you are likely to have to pay for this.
Howard Ogollegos
Howard O'Gollegos writes for JustCommercialMortgages.com the UK's No.1 site for the latest commercial mortgage rates and JustCommercialMortgages.com news.
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