One good reason for
re-mortgaging your home is to save on costs. Re-mortgaging lets you lower the amount you pay each month provided that you do it when the interest rate goes down. What you need to know, however, is that re-mortgaging involves fees that might not be initially disclosed to you by your prospective lender. Below is a list of the fees that are worth noting.
- Early repayment. Most mortgages have a tie-in period, which limits your capacity for a renewal. If, for instance, your current mortgage has a tie-in period of five years, you should not terminate the deal until that period lapses or you will get charged 1% to 5% of your outstanding debt. To avoid having to pay an early repayment charge, do not apply for a re-mortgage until the end of the tie-in period.
- Exit fee. An exit fee is what you pay your current lender for forwarding your title of deeds to your solicitor. It is sometimes called a deeds release fee or an administrative fee. You can pay it upfront or towards the end of your mortgage. If you choose the latter, make sure that the amount is stated in black and white.
- Arrangement fee. Other lenders call it a product fee. This is the fee you pay to your new lender. Beware of those who will entice you with a lower interest rate only to charge you a very high arrangement fee. This fee can cost about £1,000 or higher. You can pay it immediately or add it to the mortgage. Bear in mind, though, that arrangement fees, when added to the mortgage will incur interest.
- Valuation fee. Valuation fees can cost anywhere between £300 and £400. A valuation fee is the amount you pay for having your property re-appraised. Some Nottingham re-mortgage packages include it for free.
Mortgage Advice Services
We understand how distressing it can be to get stuck into something that you know you will only regret in the end. Make sure that you fully understand the terms and fees associated with a re-mortgage before you commit yourself to it. Our trained staff at Mortgage Advice Services can walk you through the entire process without worrying about surprise charges or paying way more than you expected. We will spell any costs out to you clearly. Call us now at 01332 257 009 to speak to an adviser or visit our website for more information about our re-mortgage advice services
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