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.
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 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
There will be some financial companies that will offer remortgaging without fees. Some may offer free legal or valuation fees, but it may even be that you don’t have to pay any fees at all.