Mortgage Fees and Charges: A Comprehensive Guide
When applying for a mortgage, it’s essential to consider not only the interest rate but also the various fees and charges associated with the loan. At SortMyCash, we’ve partnered with Mortgage Advice Bureau to provide you with a comprehensive guide on mortgage fees and charges, ensuring you make an informed decision when choosing a mortgage.
Mortgage Arrangement Fees
Mortgage arrangement fees, also known as product fees or booking fees, are charged by lenders for setting up the mortgage. These fees can range from a few hundred pounds to over a thousand, and can be paid upfront or added to your mortgage. Keep in mind that adding the fee to your mortgage will increase your loan amount and interest payments over time.
A valuation fee is charged by the lender to assess the value of the property you’re buying. This fee varies depending on the property’s value and the type of valuation required. Some lenders may waive the valuation fee for certain mortgage deals, so it’s worth checking with your mortgage adviser.
You’ll need a solicitor or conveyancer to handle the legal aspects of your property purchase. Legal fees cover the cost of their services, such as conducting searches, liaising with the lender, and registering the property with the Land Registry. Legal fees can vary significantly, so it’s a good idea to get multiple quotes and compare the services provided.
Stamp Duty Land Tax (SDLT) is a tax paid on property purchases in England and Northern Ireland. The amount you’ll pay depends on the property price and your circumstances, such as whether you’re a first-time buyer or purchasing an additional property. Your solicitor or conveyancer will calculate the stamp duty amount and submit the payment on your behalf.
Early Repayment Charges (ERCs)
If you decide to pay off your mortgage early or switch to another mortgage deal before the end of your fixed or discounted rate period, you may be subject to early repayment charges. ERCs are typically calculated as a percentage of the outstanding mortgage balance and can be quite costly, so it’s essential to factor this in when choosing a mortgage product.
Other Fees and Charges Additional fees may apply depending on your circumstances and mortgage product, such as:
- Mortgage account fees: A one-time fee covering the administrative costs of setting up and maintaining your mortgage account.
- Higher lending charges: A fee that may apply if you’re borrowing a high loan-to-value (LTV) mortgage.
- Mortgage broker fees: If you’re using a mortgage adviser, they may charge a fee for their services.
At SortMyCash, we understand that choosing a mortgage involves considering various fees and charges. In partnership with Mortgage Advice Bureau, our expert mortgage advisers will guide you through the mortgage process, helping you understand and compare the costs associated with different mortgage products. To get started, fill in our simple online form, and a dedicated mortgage adviser from Mortgage Advice Bureau will get in touch with you via your preferred contact method.