mortgages - fees
All costs (fees etc) associated with the mortgage will be detailed in the Key Features document provided when you get a mortgage quote. A good adviser will look at all mortgage deals taking in to account their fees and your circumstances as well as the rate that is charged. Common fees charged, but not exhaustive, are as follows. Remember, rjfmortgages will not charge you a fee.
Broker Fee - some brokers/advisers charge these. We don't.
Arrangment Fees - charged by the lender for setting up the product. More often than not this can be added to the loan. They are usually either a percentage of the oan amount or a fixed amount.
- charged by the lender and similar to arrangement fees. Some lenders charge both. They are usually a fixed amount. - the fee charged by the lender for sending a surveyor out to check the property is worth what you are paying or the remortgage amount so that they are sure it offers sufficient security for the loan. You can usually opt to pay extra and have a hombuyers report carried out that will give you an opinion on the condition of the property. The valuation fee is usually paid upfront and your adviser will ask you for card details or a cheque to pay for this. Some mortgages provide a free valuation but this is becoming more rare. - (sometimes called redemption penalties) this is the fee, usually a percentage of the loan amount, charged for paying off the loan or part of the loan within the initial discount/deal period. Sometimes these apply beyond the initial deal period.Redemption administration charge - Sometimes called a deeds release fee or closing account fee. This fee is an adminitration charge, charged by the lender for closing your account. These have become quite controversial in recent years as they have increased from around £50 to around £300.
- Sometimes included free within a mortgage deal for remortgages but this is becoming more rare. A typical fee for a remortgage would be £365. Purchase fees can differ depending on the cost of the property and whether you are selling and then purchasing or just purchasing. Fees are typically the same as for a remortgage plus searches and disbursements which are usually in excess of £300+VAT. If purchasing you may also be required to pay stamp duty. Currently (April '08) this is 1% of the purchase price of a property over £125,000 (£125,000 is exempt and £125001 pays £1250!), 3% of a property £250,001 or more and 4% of a property £500,001 or more. As of 2nd September 2008 the UK Government has announced that Stamp Duty will only be payable on properties costing more than £175,000. Some areas are exempt irrespective of the purchase price. Click the following link and enter the post code to check to see if your area is exempt.As with most things you get what you pay for and the cheapest legal fees do not always give you the best service. Sometimes it is worth paying a little extra to get a good service. Particularly if you require a quick turn around.
- You are paying this to pay the lenders bank charges for transferring the money to either yours or your solicitors account. - this fee is paid to the lender if you do not take out their own buildings insurance and is usually in the region of £25.