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How Much Will It Cost To Remortgage My Home?

REMORTGAGING | 27.03.2017

Remortgaging your home can be a great way to free up equity in your property to be used elsewhere. Whether you want to spend money renovating your home, pay for your child’s university fees or fund an around the world trip, remortgaging can give you access to the funds you need.

However, although remortgaging can be a financially rewarding move, there are a multitude of fees to take into account before signing on the dotted line.

Early repayment charges

Early repayment charges are imposed when a borrower wishes to break their existing mortgage deal or change its terms before the contract has ended. When someone wishes to remortgage their home, the lender may demand an early repayment charge in order to recoup some of the interest lost. The charge tends to be a percentage of the original mortgage debt. If you decide to go ahead with the remortgage and pay the repayment charge, you can choose whether to pay this fee upfront or increase your mortgage repayments to cover it.

Exit fee

When remortgaging your property, you may have to pay an exit fee. This fee pays for your current lender to forward information over to your solicitor and usually costs up to £300. Usually, you’ll be given the option to pay this fee upfront when you first set the mortgage up or pay it at the end before you leave. You won’t have to pay interest on this fee, but if you choose the latter option, make sure you get an agreed cost in writing so you don’t fall victim to sneaky price hikes at the end.

Booking fee

A booking fee is charged upfront and is usually required in order to ‘book’ the loan while the application is being processed. Some lenders may refer to this as an ‘application’ or ‘reservation’ fee. The cost of booking fees can vary between lenders but tends to be around £100.

Arrangement fee

An arrangement fee is paid to the lender to cover the cost of admin. Arrangement fees can vary, though they tend to be between £1,000 to £2,000. Most lenders will let you decide whether to pay the arrangement free upfront or whether to add it to the cost of the mortgage. If you add it to the mortgage, you’re likely to have to pay interest on it. Some lenders choose to charge their arrangement fees as a percentage of the loan, rather than issuing a flat fee. If you’re taking out a very large mortgage, this type of fee could see the costs of remortgaging your home rise significantly. When looking for the right mortgage for you, it’s wise to take the arrangement fee into account as it can make a huge difference to the cost of the loan as a whole. Some lenders request small arrangement fees on mortgages with large interest rates, while others do the opposite. This can cause confusion and distort the attractiveness of the deal. If you need help determining which deal is most cost effective for you, it may be worth seeking the help of a mortgage broker. They’ll help you determine exactly which mortgage product is best for you, comparing a large number across the market.

Valuation fee

Before a lender issues a loan, it will want to assess the quality and value of the property you wish to buy. Your lender will do this by carrying out a valuation of your property and charging you a fee for the work. Valuation fees tend to be upwards of £300 but in some cases, your lender may include the valuation fee within their mortgage package.

Legal fees

You’ll need a solicitor to remove the original lender’s details from your property and register the new lender. Usually, legal fees will be around £300 during a remortgage, but you may be able to find a remortgage deal that includes a free legal package within it. Before agreeing to anything, assess the price and compare it to other deals to ensure you’re actually saving money.

Mortgage broker fees

If you choose to use a mortgage broker, you may be charged a fee. Often, the cost of these fees will be offset by the amount of money the broker can save you. The best brokers will compare hundreds of mortgage deals before highlighting a selection of products best suited to you.
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Complaints:

In the event that you wish to complain, you can contact us by email, telephone or letter.

Our address for this is:
Complaints Officer, TaylorMade Finance Ltd, 4 Church Road, Urmston, Manchester, M41 9BU. Our email address is info@taylormade-finance.co.uk and our telephone number is 0161 776 1089. We will then investigate the issues raised and inform you of our findings. Should you be unhappy with the resolution to your complaint you may contact the Financial Ombudsman Service, who can be contacted at the following address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR.

Email: complaint.info@financial-ombudsman.org.uk
Phone: 0800 0234 567
https://www.financial-ombudsman.org.uk/

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