Mortgage Fees

When you take out a mortgage, as well as the fact that you are tying yourself down to many years of debt (the grim reality perhaps) there are also the fees to consider.

And the fees are certainly not to be sniffed at, and in fact many of the fees have increased significantly in recent years as lenders between them seem to have each increased some of them markedly turning them from a minor annoyance into quite a consideration.

It is the fact that the fees are often quite significant that means you will need to be very careful when looking at best buy tables and so forth, as you need to take into account what all the fees will be on your mortgage too as these can swing what is the most and not so competitive mortgage product for you.

The fee that you will often come across in virtually all mortgages is the product fee, or the arrangement fee. This is the fee that you pay for a particular deal and it can often be around the level of Ł1,000 based on the lender and of course the type of mortgage that you take out.

Usually there is the option to have the product fee added to the mortgage debt rather than being paid up front. The reason why this could be a good idea is that if the mortgage does not go ahead then you may not be able to get back the product fee if paid upfront, meaning you are out of pocket to the tune of around Ł1,000 with nothing at all to show for it!

Another common fee is the valuation fee. The lender needs to know that the property it is lending you the money on is worth at least the amount of the mortgage fee, and this will mean that you will be charged a fee by the lender for them to assess the value of the property.

Other fees will include things like a CHAPs fee, which is for the cost of transferring the money from the lender to your solicitor, although this fee is very small compared to most and typically between around Ł10 - Ł30.

Another fee to consider is an exit fee, this is an admin charge you pay if you redeem the mortgage (by switching or because you have finished paying it off, perish the thought!), and this is one fee that has gone up significantly in recent years... you will often have an exit fee in excess of Ł200 these days.

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