What fees are involved with re-mortgaging?


Remortgaging a property may sound like a good idea especially when you need some funds. The fees associated with remortgaging, however, may make the process very expensive. Mortgage fees may seem like a small percentage of the mortgage value, but when you take time into account, it adds up to a large sum of money. #

The first of the remortgaging fees is the Early Repayment Charge. The fee depends on what arrangement you have with your current mortgage lender. It may be a fixed or a discounted mortgage. The early repayment charge is usually paid to end the initial mortgage. Early Repayment Charges may be calculated using multiple criteria. You may be charged a percentage of the original mortgage amount. The second criteria would be to be charged based on the amount you are to pay every month in interest. The third way may be to charge you based on the amount you still have to pay the mortgage. The fourth rests on the amount of your mortgage you have already repaid. The lender on the remortgage decides what criteria and the rate to charge.

The second fee that a remortgage may cost you is a Rearranging Fee. The fee is based on the fact that the lender will have to ‘rearrange’ the mortgage to suit the current situation. The remortgage will inevitably disrupt the initial arrangement, and new terms will have to be set forth. The Rearranging Fee may also be called by a variety of names including product fees, booking fees, administration fees or application fees.

Legal Fees will also be included in the set of charges associated with the remortgage. A mortgage is a contract by law and reconfiguring the contract will be subject to the law too. Legal fees may cover issues such the property valuation and terms of the ownership period. One can rest easier knowing that legal work will not be as lengthy or costly in a remortgage as in the initial mortgage agreement. In a remortgage, you close one mortgage account and open up another mortgage account. You will be required to pay Exit Fees for closing the initial account.

The Exit Fees are the lowest of the bunch, and they will often be part of the original mortgage so you can plan beforehand. You can request a redemption statement from your mortgage lender to clarify your potential Exit Fee if it is unclear. If you switch mortgage lenders, you may have to pay a fee to the new mortgage lender. There is no set of fees so you and your new lender can agree on which fees have to be paid. Remortgaging is a complicated process, and you will need all the help you can get. Visit our website http://www.mortgageadviceservices.co.uk/remortgaging/ or call us at 01332 257087 and get quality remortgage advice that will spare your purse.


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