Mortgages are so important these days and they are actually a big help both for the lender and the borrower. However, choosing the right mortgage is not an easy decision to make. Commonly, people only look at the rate of interest being charged, the mortgage tenure and the type of mortgage. Well, these are very important points to consider and analyze but there are more things to know about before signing the deal. Here in this article I would like to throw some light on one of the most important points in this regard. It is the Mortgage Charges.
These days the rate of interest has dropped down due to various reasons but the fee involved in the whole process has only climbed upwards. I would like to go a step further by mentioning that the tricky approach adopted by the lenders has made things rather more complicated for borrowers. So here we would like to pick out the most important fees related points that you must know about.
Listed below are the fees to be paid while applying for a mortgage.
Booking Fee: It is a fee that is charged while you apply for the mortgage.
Arrangement Fee: It is a fee that is charged by the lender to set up the mortgage.
Valuation Fee: It is a fee that is charged by the lender to carry out a survey on the property to be purchased.
Legal Fee: It is a fee that is charged by a solicitor to carry out all the legal paper work.
Higher Lending Fee: It is a fee that is charged by the lender only in cases where the mortgage covers maximum portion of the property value.
Advice Fee: It is a fee that is charged by an expert financial adviser. There are many free advisors though.
Chaps Fee: It is a fee that is charged by the lender for sending the funds to the solicitor.
Own Building Insurance Fee: It is a fee that is charged by the lender if you have purchased a building insurance from elsewhere.
Listed below are the fees to be paid after you have the mortgage.
Annual Percentage Rate (APR): The APR of a mortgage is calculated to feature in the total interest cost beyond 25 years term plus any related fees.
Early Repayment Charges (ERC): The ERC of a mortgage is charged by the lender if you withdraw from the deal before the time fixed at the start.
Exit Fee: This is a fee charged if you switch the lender or switch the mortgage.