Your All-Important Guide to the Different Fees and Charges for Mortgages
We all have visions of owning our dream homes one day – and if you are fortunate enough to have the chance to turn that dream into reality, good for you. But only the lucky few can actually pay for the property of their dreams outright – most of us have to contend with applying for a loan. Hence, mortgages. Mortgages, in their essence, are easy to understand: you borrow money for a piece of property and then you pay it back, with interest, in a certain span of time. But when you are applying for a mortgage, there are other expenses and fees with which you will have to contend. Here, then, is your all-important guide to the different fees and charges for mortgages.
The arrangement fee
The arrangement fee is the fee for the actual ‘mortgage product,’ and this is why it’s sometimes referred to as the ‘product fee.’ You have the option to add this to your loan (your mortgage), but you will end up paying more on your repayments. The arrangement fee can range anywhere from none – to more than £2000.
The valuation fee
The valuation fee is the lender’s valuation of your property; it is the property survey. You may be able to find a lender who can waive the valuation fee, depending on your mortgage deal. But you can also opt to have this done yourself, since the lender’s property valuation will only look at the property’s actual value and will not include assessments on the property’s future expenses or potential issues. Valuation fees can be from £150 to 1500, and this depends on the property’s value.
The booking fee
This fee is sometimes added when you first begin your mortgage application, and it is often non-refundable (even if your mortgage isn’t approved). Some providers include it in their arrangement fee, but others will only decide to add the booking fee depending on your mortgage size. The cost for this is around £99 to 250.
The mortgage account fee
The mortgage account fee is the cost of the lender’s overall handling of your mortgage arrangement, from setting it up to maintaining it to closing it. If this is included in your fees, you may not have to pay a related exit fee. The cost for the mortgage account fee can be between £100 to 300.
There are other fees associated with your mortgage, such as the telegraphic transfer fee, the above-mentioned exit or closure fee, and the mortgage broker fee, which can either be a commission or an average of £500, as confirmed by a mortgage advisor Taunton from Open Vision Finance. To understand your expenses for a mortgage, it is always best to consult with an expert – and an expert mortgage broker will help you find the best deal as well.
Image courtesy of Stuart Miles/FreeDigitalPhotos.net