When most people take out a mortgage, the lender often provides them with a fairly low introductory rate for the first few years. However, once this introductory or trial period ends, your mortgage is usually switched over to a much higher standard variable rate or fixed rate. This higher rate can see interest payments suddenly skyrocket, which can cost you as much as an extra ₤25,000 to ₤50,000 in interest alone over the life of the mortgage.
For this reason, many people choose to look into a re-mortgage as a way to lock in a lower rate. While re-mortgaging might be a good idea in a number of situations, it is not always worth it, as you need to know that the amount you'll be saving on interest is more than the additional fees and costs you'll have to pay for the re-mortgage.
While these additional costs of re-mortgaging aren't exactly hidden, they can still be difficult to figure out. This is because the total cost associated with a re-mortgage depends on the fees charged by both your current and future lenders, which is why we recommend seeking
re-mortgage advice to make sure that you don't get caught off guard by any unexpected bills.
Typical Costs and Fees Associated with a Re-mortgage
· Early Repayment Fee. In most cases, if you decide to re-mortgage during the introductory period, your current lender is likely to charge you somewhere between 1 and 5 percent of your outstanding mortgage debt as a way to recoup the interest their losing.
· Exit Fee. No matter when you leave your mortgage, you will most likely have to pay an exit or deeds release fee, which can range anywhere up to several hundred pounds. Still, not all lenders charge this type of fee, which is why it is helpful to seek out re-mortgage advice in order to understand exactly what you'll have to pay.
· Mortgage Arrangement and Booking Fees. Once you have left your existing mortgage, you'll then need to pay both the mortgage arrangement and booking fees to the new lender. Again, these fees can vary quite dramatically, which is why Mortgage Advice Services takes them into account in order to find you the best possible deal on your re-mortgage.
Labels: benefits of re-mortgaging, mortgage advice nottingham, re-mortgage rates, re-mortgaging fees, the re-mortgage process
