mortgages - fees

All costs (fees etc) associated with the mortgage will be detailed in the Key Features document provided when you get a mortgage quote. A good adviser will look at all mortgage deals taking in to account their fees and your circumstances as well as the rate that is charged. Common fees charged, but not exhaustive, are as follows. Remember, r j f mortgages will not charge you a fee.

Broker Fee - some brokers/advisers charge these. We don't.

Arrangement Fees - charged by the lender for setting up the product. More often than not this can be added to the loan. They are usually either a percentage of the loan amount or a fixed amount.

Application Fees - charged by the lender and similar to arrangement fees. Some lenders charge both. They are usually a fixed amount.

Valuation Fees - the fee charged by the lender for sending a surveyor out to check the property is worth what you are paying or the remortgage amount so that they are sure it offers sufficient security for the loan. You can usually opt to pay extra and have a homebuyers report carried out that will give you an opinion on the condition of the property. The valuation fee is usually paid upfront and your adviser will ask you for card details or a cheque to pay for this. Some mortgages provide a free valuation but this is becoming more rare.

Early repayment charges - (sometimes called redemption penalties) this is the fee, usually a percentage of the loan amount, charged for paying off the loan or part of the loan within the initial discount/deal period. Sometimes these apply beyond the initial deal period.

Redemption administration charge - Sometimes called a deeds release fee or closing account fee. This fee is an administration charge, charged by the lender for closing your account. These have become quite controversial in recent years as they have increased from around £50 to around £300.

Legal Fees - Sometimes included free within a mortgage deal for re-mortgages but this is becoming more rare. A typical fee for a remortgage would be £365. Purchase fees can differ depending on the cost of the property and whether you are selling and then purchasing or just purchasing. Fees are typically the same as for a remortgage plus searches and disbursements which are usually in excess of £300+VAT. If purchasing you may also be required to pay stamp duty. Currently (March ’10) this is 1% of the purchase price of a property over £125,000 (£125,000 is exempt and £125001 pays £1250), 3% of a property £250,001 or more and 4% of a property £500,001 or more. The Budget of March 2010 announced a new rate of 5% for properties costing   £1,000,000 or more and also an exemption for first time buyers paying £250,000 or less. Some areas are exempt irrespective of the purchase price. Click the following link and enter the post code to check to see if your area is exempt. Please be aware that r j f mortgages can not be held responsible for the content of external sites and that external sites may be unregulated.

http://www.hmrc.gov.uk/so/dar/dar-search.htm

As with most things you get what you pay for and the cheapest legal fees do not always give you the best service. Sometimes it is worth paying a little extra to get a good service. Particularly if you require a quick turn around.

Telegraphic Transfer fee - You are paying this to pay the lenders bank charges for transferring the money to either yours or your solicitors account.

Insurance administration charge - this fee is paid to the lender if you do not take out their own buildings insurance and is usually in the region of £25. 

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. 

 r j f mortgages is an appointed representative of TenetLime ltd which is authorised and regulated by the financial services authority. Not all buy to let mortgages are regulated by the financial services authority. TenetLime Limited is entered on the FSA Register (www.fsa.gov.uk/register) under reference 311266

The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.