It’s true that you can lower the cost of the monthly premiums on your mortgage by remortgaging. However, it is important to consider the full cost of it rather than just the main rate when you are deciding on the deal that is best for you.
You need to look at fees and the rate to calculate how much you possibly could save by switching to an alternative deal. You should also consider the repayment charges connected to your current deal if you’re interested in remortgaging before that one has finished.
In the following, we look at some of the charges and costs involved when remortgaging.
Legal Fees Involved in Remortgaging
There are fees that you need to pay your conveyancer or solicitor to fulfil the legal work duties of transferring mortgage from your current lender to the new one. They will also take care of the details involved in paying your outstanding debts to the lender you have currently. The legal fees, as there is not as much work involved in remortgaging, won’t be as much.
Arrangement Fees Involved in Remortgaging
Many lenders will often charge a fee for arranging the new mortgage. This charge can vary from one lender to another. There are some that don’t even require an arrangement fee though. This could be a fixed amount or could be a % of the money you’re borrowing. It’s normally the case that with lower mortgages, there will be higher arrangement fees.
Booking Fees Involved in Mortgages
In addition, the arrangement fees noted above, many lenders sometimes charge booking fees that you need to pay when securing a specific remortgage deal. This is paid upfront when submitting your application for a mortgage and can’t be added to it. Typically, these fees are between 100 and 200 and are always non-refundable.
Valuation Fees Involved in Remortgages
Before they allow you to invest in remortgaging, your new prospective lender will be looking to valuate your property. This is so they understand how much your property is worth. Normally, they’ll use their own surveyor or valuer, but will look to you to pay for the valuation. Unless, of course, it was included in your new deal. It can be a complicated process, but ultimately, much of it will be done for you. Reports will be generated by the surveyor, and a value will be calculated by the valuer. Often, you’ll also go through an appraisals process, but again, this will be led by a professional appraisal firm.
Exit Fees Involved in Mortgages
Often called mortgage completion fees or exit fees are charges involved in the administration of mortgages and expected by many lenders when you are looking to fully pay off your mortgage. Exit fees are normally involved when you are reaching the end of the term on your mortgage or looking to remortgage somewhere else.
ERC or Early Repayment Charges Involved in Mortgages
If you’re looking to leave your existing mortgage deal before it has finished, you’ll be expected to pay early repayment charges. Before remortgaging you need to check whether you need to pay an early fee or not.
Deals for Remortgaging Without Fees
In the realm of remortgaging, some financial institutions extend enticing offers by waiving fees associated with the process. These perks can include not only free legal or valuation fees but, in some cases, the complete absence of fees. This can be particularly appealing for individuals looking to switch their mortgage and reduce the financial burden of additional costs. These fee-free options can streamline the remortgaging process and make it more accessible for those seeking financial flexibility. That being said, as you explore remortgaging options, it’s advisable to consider companies like Mortgage360, which may help find competitive deals and fee structures that align with your financial goals and preferences. After all, choosing a reputable and transparent provider becomes crucial in navigating the complexities of remortgaging and ensuring a favorable outcome for your financial situation.
Conclusion
In conclusion, while remortgaging offers the potential for lower monthly premiums, it’s crucial to adopt a comprehensive approach when evaluating its viability. Beyond the main interest rate, factors such as fees and associated costs play a pivotal role in determining the overall savings achievable through a switch. A thorough assessment, considering both the current deal’s repayment charges and the potential benefits of an alternative arrangement, is essential. Prospective remortgagers should meticulously calculate the complete cost implications and weigh them against the anticipated advantages. By doing so, individuals can make informed decisions, ensuring that the chosen remortgaging strategy aligns with their financial objectives and results in tangible savings over the long term.