RSS Feed
Twitter
July 22nd, 2011 
usmblogger If you are looking to fix your mortgage payments, borrow some additional money for home improvements or a new car or you simply want to save money on your mortgage, a remortgage could be the perfect solution for you.
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?
Valuation Fee: Any time you remortgage a property, the new lender will insist upon a new valuation of the property to be undertaken. This is principally to show that the property, banks will not take anyone’s word simply that their property is worth what they say it is, or that the property is structurally sound. An independent verifier must be employed to come to impartial conclusions about the property.
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.
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: Most remortgage fixed or tracker rate deals come with some sort of booking or application fee. Often these can be several hundred pounds or, in some cases, a percentage of the mortgage amount.
A ‘booking fee’ is similar, one fixed fee for administration, paid up-front. You should always bear in mind that when you pay a booking fee, it is largely none refundable. If you submit your remortgage application and subsequently decide not to take the application further, you will probably not receive any refund of this 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.
Posted in 
Tags: