Mortgage Fee's
Introduction
As with most lending products there are costs involved in seeking a mortgage. You will also encountering fees when your are looking to remortgage, however we cover remortgaging fees in more depth in our Remortgaging Section.
Fees will vary from lender to lender, broker to broker, product to product and your circumstances. Below we have provided a breakdown of average costs. This should give you a good figure to keep in your mind when you are thinking of the costs of mortgaging.
Solicitors Legal Fee’s:
When purchasing a property (or land for that matter) you will need a solicitor to handle the conveyance and other legal works.
The legal fees for the average mortgage application are in the region of £250 to £500 depending on the complexities of the mortgage and conveyance.
Mortgage Lenders Fee:
Most mortgage lenders will charge an application fee or a fee to check your eligibility for such borrowings. These figures vary wildly and as such, it is essential you enquire what these fees are. To try to establish an average would be misleading however it is reasonable for most people seeking a mortgage to pay between Nothing and £2,000.
Valuations Fees:
When you purchase a property it is important to the lender to establish the properties current market value to ensure their risk is mitigated by the properties worth. This valuation must be performed by a surveyor and depending on the type of survey performed the prices can vary however for the average property a fee of £250 will be applicable.
Mortgage Broker Fee’s:
Mortgage brokers, the people who arrange the lending for you will also be looking to make money however it can be a little unclear.
Most mortgage brokers will charge you a fee that equates to a percentage of the overall loan, for example their fee may be 1%, so on a mortgage of £100,000 the fee would be£ 1,000.
Other mortgage brokers will offer you a free service, however we would urge caution as what costs nothing is usually worth nothing. As with many financial products, the supplier (the lender) will often incentives the use of their products by paying introduction fees, or kickbacks. We have found that this often means you the borrower end up being pushed towards products that are not best suited to your needs.
Other mortgage brokers will charge you a fixed fee for their services – we would recommend this arrangement.
When a mortgage broker offers their services for a fixed fee you can be confident that they are acting impartially, while offering you a greater level of clarity that percentage fee brokers as you know what you will be paying regardless of your mortgage requirements.
A Final Note:
Beware of fee’s included mortgages or assisted fee mortgages. These are mortgages were the lender will cover the entire or a certain amount of your Legal, Arrangement and Valuation fees. Whilst these can on occasion work out for certain users to be cheaper than paying fee’s up front, it is worth checking with your broker as this is not usually the case. What looks to good to be true, usually is!