Mortgage Blog: Fees You Should Be Looking Out For

Whatever mortgage you're considering, make sure you check the fees that are involved

. That's the view of leading property experts after research found that arrangement fees on mortgage deals rose by 13% between September 2009 and June 2011. As well as increased arrangement fees, there are also a number of other charges you should look out for when you take out any mortgage.

Mortgage arrangement fees

Research from a leading financial comparison site found that fees for tracker and fixed-rate mortgage and remortgage deals increased by 13% in the 20 months to June 2011.

Clare Francis from moneysupermarket.com says: "When looking for a new mortgage, it's easy to be lured in by low headline rates, however it is vital borrowers take into account arrangement and booking fees as part of the overall cost. It will all depend on the amount you are looking to borrow - on large mortgages a high fee can be worth paying in order to secure a low rate. However, with smaller mortgages, where a high fee will form a larger proportion of the overall loan size, it may work out cheaper to keep the set up costs low even if it means paying a slightly higher monthly payment."

Whatever mortgage you're considering, make sure you take both the rate and the fees into account.

Valuation fees

A mortgage lender will require a valuation of the property you are mortgaging. The cost is generally based on the estimated value of the property and the type of survey you require. Basic mortgage valuations start from around 200 and are sufficient for the lender. However, you may want a more detailed survey on the property you're buying and so you may choose a 'homebuyers report' which can cost upwards of 300 to 400.

Mr Osborne from leading new homes website whathouse.co.uk says: "Valuation fees can run into several hundred pounds. For a new house under guarantee you arguably don't need an expensive survey, whereas if you're buying an older property you may want to invest in a more costly comprehensive valuation."

Solicitors fees

Whether you are buying a property or remortgaging, there will be some legal work involved. As well as paying your solicitor you'll also foot the bill for local searches, disbursements and Stamp Duty, depending on the purchase price of your new home. If you're remortgaging, your new lender may often meet the cost of the legal work involved. Osborne adds: "For a property purchase, you should ask for quotes from several reputable conveyancers as fees can differ. Always establish the level of service you can expect and exactly what your solicitor's fees will be before you commit."

by: Keith Osborne

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