Remortgaging a house is usually a good way to use part of the home’s
equity to access large sums of money. It can also be used to switch to
friendlier mortgage terms which have the potential of making some extra
money through monthly payments. However, before deciding on remortgaging
your home, it’s always a good idea to find out more about the fees that
are associated with the process. Some of these include:
The Legal Fees
Switching from one mortgage to another is usually a legal process since
it may mean switching to another lender. You will need a real estate
lawyer to go over the details of the deal to make sure that it’s above
board before going ahead with the process. Find out how much this will
cost before committing to doing the remortgaging.
Exit Fees
In order to re-mortgage a home, you will need to exit from your old
mortgage, a process that might cost you some money. A similar cost is
the cost of early repayment of the mortgage from your old lender. Some
lenders may opt to take up these fees, and some may not. Always try to
find out how much you are supposed to pay before starting this process.
Arrangement Fees
Some lenders will charge you a fee for arranging the remortgage. This
varies from lender to lender, so you need to consult them before getting
a concrete idea as to how much this will cost.
In many cases, the cost of remortgaging will be significant. If you do
not plan for it, you may initiate the process only to find that you
can’t see it through. This might put you in a dire financial position,
and should therefore be avoided as much as possible. Other fees you will
need to consider include the cost of mortgage advice and life insurance
that you may need when switching lenders.
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