Those Five Niggly Fees To Keep An Eye On When Remortgaging

Remortgaging is a great way to save money on your mortgage payments as well as taking advantage of a low rate mortgage deal.  It is also a good way to borrow some additional funds for debt consolidation or home improvements.

However, whilst remortgaging can save you a considerable sum in terms of your monthly payments, there may be costs incurred as part of the remortgage process.  It is vital that you take any fees and charges into account as they could significantly reduce the overall saving you make by switching your home loan.  Here are five fees to watch out for when remortgaging.

Valuation Fee – When you remortgage your home, the new lender will require a valuation of your property to be undertaken.  This is mainly to confirm that the property is suitable security, both in terms of its market value and the structural integrity.

Even if a lender uses an in-house surveyor to undertake the valuation, there may be a cost for this.  Valuation fees can range from around £200 to over £1,000 (depending on the age and value of your home) and this fee can easily double should you wish to have a more detailed homebuyers or structural report commissioned.  Shop around, as many lenders will meet the cost of a basic valuation as part of their remortgage deal.

remortgage fees
Remortgage Fees

Source – kagey_b

Broker Fees – Many homeowners employ the services of a mortgage broker to help them with their remortgage.  Brokers have a wide knowledge of the market and many can shop around for the best deals from all the lenders in the UK.  However, whilst some brokers take their fee from the mortgage provider, others will charge a fee directly.

Admin Fees to Current Lender – Even if there are no fees to your new lender as part of a special remortgage deal, bear in mind that your existing lender might levy some charges.  Many mortgage lenders charge administration or ‘closing’ fees to cover the paperwork involved in closing your mortgage account with them.  These will generally be detailed on your ‘redemption statement’ from your existing lender.

Arrangement/Booking Fee – Even if your new lender will meet some of the costs of a remortgage, they may still charge an arrangement or booking fee.  These generally relate to the specific mortgage products they offer.  For example, to take advantage of a low fixed rate, you may have to pay an arrangement fee of £999 which can be paid on completion or added to your mortgage.

A ‘booking fee’ is a similar charge, but is often paid up-front. Bear in mind that if you pay a booking fee when you submit your remortgage application and subsequently decide not to proceed, you may not receive a refund of this fee.

Legal Fees – As part of the remortgage process, a conveyancer or solicitor will have to become involved.  The role of the conveyancer is to deal with the legal work involved in a remortgage including local searches and dealing with the Land Registry.

Many remortgage deals include ‘free legals’ as a perk.  However, if there is any additional legal work to undertake – perhaps you are transferring the property into joint names – then you may face a bill for this additional work.

Guest blogger James McHeggins writes for one of the UK’s top sites for the latest remortgage rates and best remortgage deals.

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