When it comes to finding the perfect mortgage deal, it’s not just about snagging the lowest interest rate it’s about considering all the fees that could end up costing you a pretty penny in the long run. Here’s the 5 mortgage Costs You might not know about and the lowdown on what to watch out for:
Product Fee
Most mortgages come with a fee tagged onto them. Sounds straightforward, right? Well, not quite. Lenders have a knack for calling this charge different names like a product fee, mortgage fee, or application fee. Typically, it’s hovering around £1,000. And here’s the kicker: you can choose to cough it up upfront or roll it into your mortgage. But beware! If you tack it onto your mortgage, you’ll be paying interest on that too. What does that mean? It’s going to cost you more in the long run.
Booking Fee
Picture this: you pay a booking fee to secure that dreamy mortgage you’ve been eyeing. The catch? If, for some reason, you don’t end up taking out that mortgage (think sale falling through), that booking fee is adios, gone for good.
Valuation Fee
Before a lender green-lights your mortgage, they’ll want to suss out the value and condition of the home you’re gunning for. Cue the surveyor, whose valuation will be at your expense, varying from FREE to a few hundred and quite a bit more. Reminder: this survey is solely for the lender’s benefit. For a full understanding of the property’s condition, you’ll need to fork out for a Homebuyers Survey.
Early Repayment Charge (ERC)
Switching up your mortgage deal midway? Be prepared to face the music—a.k.a. the Early Repayment Charge. This one’s calculated based on the chunk of balance you’re repaying and can tally up to thousands. Sometimes, it might not even make financial sense to switch.
Mortgage Account Fee
Here’s another one: a fee to set up your mortgage account. Some lenders charge it upfront, while others opt for an exit fee when you’ve paid off the mortgage.
To decipher the real cost of a mortgage, it’s not just about the interest rate. Take into account all those fees and incentives like cashback. It’s easy to get caught off guard and end up shelling out more than planned. If you’re feeling a bit lost in this maze, fret not—we’re here to guide you through it all. 🏡✨
If you’re looking for a mortgage, look no further! Get in touch with our team, and we’ll point you in the right direction.
