If you’re thinking about applying for a mortgage, do you really know the cost involved? You may have done your research, but sometimes there are charges and fees you have missed. In this blog we’ll be looking at some of the costs you might not be expecting to face.
Higher Lending Charges (HLCs)
A higher lending charge is a fee that you will incur if your deposit is below a specified percentage of the cost of the property you are purchasing. The usual threshold for this fee is if you apply for around 75% of the property’s value. HLCs are largely out of fashion now, and you won’t see too many lenders with this, but it’s worth keeping an eye out for just in case.
Valuation & Survey Fees
When you purchase a property, a good majority of lenders will provide you with a free basic valuation. These, however, will only be a brief examination of the property. Some lenders charge fees for these basic valuations, costing £150+ as standard. There are extra fees involved when you need a full Building Survey for reviewing a property’s construction too, so these fees can really add up.
Clearing House Automated Payment System
Although we live in a world where same-day transfers are standard, when purchasing a property lenders may charge you for using the CHAPs system. This charge usually ranges from £15 to £50 per transfer. This means if your deposit comes from two different accounts, you will be charged three times (two from your accounts, one to the buyer’s solicitors).
Early Repayment Charges
If you had a special rate mortgage and you decide to repay or move on from this before the special rate ends then there may be an early repayment charge for ending your contract early. This fee will usually be between 1% and 10% of your total mortgage.
Mortgage Exit Administration Fees
You will usually be charged for the application, arrangement and booking of your mortgage. As well as that, most lenders will charge you if you leave them or move to another lender. These fees aren’t cheap either, ranging from around £200 to £300 on average. Make sure you know your lender’s MEAF details sooner rather than later.
These extra fees can add hundreds; even thousands onto your mortgage so do make sure you know what you’re letting yourself in for before applying for a mortgage. The best way of guiding yourself through this mortgage maze is to speak to an independent mortgage advisor. Call 0115 960 1279 to speak to one of the team.