More About Looking Out For These Hidden Extras In Your Future Mortgage

When you are considering a new mortgage, there are a number of charges that banks might not spell out as much as borrowers might like them to. They are always mentioned at some point and in the end may add up to quite a lot of cash. But remortage tables in their basic form won’t spell them out. So when you are trying to compare today’s mortgage rates through online charts, don’t forget to delve more deeply to see what hidden fees you might unearth.

To understand what these fees are going to end up costing you, it is worth either asking an independent financial advisor for a written quotation or at the very least get a model of what the total repayments will be, including all fees.

Here’s some examples that you might want to be alert for when trawling through the mortgage tables in search of mortgage rates.

Exit Fees – if you do not maintain the mortgage to the end of its term and instead complete it early then the building society may try to charge you an exit fee to cover their administration costs that are involved in closing the mortgage. This may even be charged at the end of the mortgage whether it is paid off early or not. Previously these have been low fees that don’t really add up to much in comparison with the figures involved in a mortgage, but some banks have hiked up these fees to try to make more money. This is taking advantage of the small print saying that charges can be increased and can result in incredible rises.

Standard Variable Rate – this is the standard mortgage rate that the building society will charge you once your introductory period is up. It is usually around a couple of percentage points above the standard base rate. This is where the banks make their cash through those customers that don’t try to swap mortgages when the introductory offer finishes. If you are on the standard variable rate and the tie in period has passed, then it is high time to look at those remortgage charts.

Higher lending charge – over are the days of the 125% mortgage, or at least until the banks forget how badly they had their fingers burnt this time around. Most of the remortgage charts show the best buy deals and have various hoops to jump through, such as not lending more than 75% of your new property’s value. If you are borrowing more than the cutoff, then the building society may charge you a higher lending charge.

Early redemption fees – if you want to end your mortgage earlier than the offer or tie in period, there is usually an early redemption fee. This might be shown as an amount of cash or so many months’ interest. Quite often after the fixed or tracker rate ends there is a tie in period during which you cannot change from the standard variable rate without incurring this early redemption fee.

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