Re Mortgage Fees
I you are looking to remortgage, careful attention must be paid to the fee’s you will encounter in doing so.
While you may feel familiar with the costs involved in obtaining mortgage lending, there are additional considerations specific to remortgage lending.
Tie in Period Fees (Extended Early Repayment Fee)
Many mortgage lenders and products have stipulations as to the minimum length of time you can hold the mortgage for. This is different to early repayment fee’s that you will encounter if remortgaging or settling the mortgage during the agreed rate period.
The mortgage will stipulate that if anyone remortgages or settles the mortgage within a certain length of time after the agreed rate period has ended they will have to pay fees.
Whilst this may seem unfair to the borrower, it is legitimate and quite common – you have been warned!
Some mortgage lenders will not levy this fee if you transfer to another of their lending products as opposed to a competitors.
Other Fees
All the other fee’s involved in mortgaging a property will also be levied, as such remortgaging is often more expensive than mortgaging.
It is therefore of the uttermost importance when remortgaging to take all these fee’s into account and balance them against the potential saving the new mortgage product will provide you. This is not a prospect many relish as the maths can be a little mind bending, especially when dealing with variable rate mortgage products (such as trackers and capped mortgages), we therefore recommend you speak to a mortgage broker at least 3 months before you are returning to your lenders SVR bin.
The same caveat for fee’s included mortgages applies for remortgages, don’t just assume they save you money, check the maths.