Fees and charges

When looking for a mortgage you need to take into account any fees and charges the lender is likely to charge you, before making any rash decisions. The types of fees you may come across are as follows: -

Arrangement fees.

These are otherwise known as administration, arrangement, booking and application fees. Some are payable when you apply, on completion and some require the fee part on application and part on completion. Some lenders refund these fees if your mortgage falls through, while others don’t. It is advisable you check the policy of your lender before making any assumptions.

Valuation Fees.

A valuation enables the lender to check the condition, give a brief description of any faults that could seriously affect the property, and to valuate the property. It is done to ensure that the value of the property is adequate security for the loan. The fee is payable by you to your lender, and is based upon the price of the house. For example, with a £200,000 property you will be expected to pay a fee in the region of £360 and £430. Some mortgage deals, and especially re-mortgage deals, offer a free valuation fee as in incentive to sign up.

You will also have to pay a valuation fee if you are remortgaging to a different lender, and even if your house purchase or remortgaging doesn’t go through, you may not get your fee refunded, so think carefully before making any decisions.

Other Mortgage Charges.

It is important to be aware of the many charges your lender is likely to throw at you throughout your mortgage term. Listed below are examples of the types of fees you may come across. Be aware that they can vary from lender to lender, but in general they are in the region of £10 to £100.

1. A fee for a copy of the title deeds.
2. A fee for a copy of a statement.
3. Arrears administration fees.
4. Bounced cheque fees.
5. Unpaid direct debit fees.
6. Deeds release fees.
7. A fee for lengthening or shortening the term of the mortgage.
8. A fee for changing your mortgage from repayment to interest only, or ditto.
9. Redemption fees.
10. Admin fees.
11. Buildings insurance switching fee, basically when you change your insurance to another company.