Remortgage Broker & Lender Fees & Costs Explained

remortgage broker fees

Remortgage Deals For 2024 And Beyond

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Remortgaging can be an ideal solution for raising cash, paying off bad debt and getting your finances back on track. However, it’s not as simple as finding a deal with the most attractive interest rate or working with a broker who understands the subprime mortgage market.

Admin Charges

This is a charge to be on the lookout for as it can add up to £300 to your expenses. You can either pay this charge upfront to your existing lender, or you can tack it onto your remortgage. If you choose to do that, it’s going to affect your loan-to-value ratio, thus affecting interest rates on your remortgage deal.

This is also referred to by some lenders as an exit fee or a deeds release fee. This charge is for your lender to forward the title deeds of your property to your solicitor. That’s it. The amounts charged for this vary by lender and will be stated in your Key Facts Illustration as well as your official mortgage offer.

Arrangement fee

Every lender has these fees and some are sly on how they use them. Many of the lower interest rate mortgages are bolstered by a high fee to access them. It has been known to be upwards of £2,000. There are also some lenders that will have no arrangement fees, but in that case, it’s usually a higher interest rate.

This is a fee for which lenders can allow you to add it onto a homeowner loan, provided you aren’t applying for a 95% LTV mortgage offer as it’s likely to push your loan amount over what the lender can offer.

remortgage costs rental

Booking fee

To secure a mortgage offer, there are some lenders that will have a booking fee, which is only to secure the mortgage offer. Price-wise you can expect this to be a maximum of around £200, and it is payable upfront and non-refundable so if the deal falls through, the booking fee or arrangement fee as it’s sometimes called will be lost.

Broker Fee

If there are fees involved in using a broker, the best price will be a fixed fee. The higher cost is when the fee is based on a percentage of the loan value. Just a 0.5% broker fee for your entire homeowner loan amount will be far higher over the long term than a fixed fee. Of course, your best course of action is to find a fee-free broker. Where brokers do charge fees, they all vary so you will have to inquire with each to find out if there are fees and if so, how much.

Early repayment fees

If you intend to remortgage to raise cash for whatever reason before your current mortgage deal expires, there’s every chance that you’ll have an early repayment fee applied. This is standard with all lenders as they base their profits on the longevity of your mortgage term. If you’re on a five-year fixed-term deal, the lender will have calculated how much profit they’ll get from your loan. When you back out of the deal earlier than expected, that’s a loss to the lender. To counter the cost, a clause is put into the mortgage terms that should you exit the deal before it expires, you’ll have to pay an early repayment fee. Not all mortgages have this, but the majority do.

In terms of how much it’ll cost it’s usually up to 5% of your mortgage value.

If you are going to incur an early repayment charge, there are two ways you can go about paying it. You can 1) use your own money or 2) Factor it into your remortgage. If you choose to add the early repayment fee onto your new mortgage, it is going to affect your loan-to-value ratio, which can have a knock-on effect on the interest rate you’ll be offered.

When you’re looking through various remortgaging deals, you’ll notice that many include a free legal service. This will be a solicitor of the lender’s choosing and it only includes the bare minimum which is to transfer the lender’s name on the property’s title deeds. That’s it. It will not take into account any personal changes you need to make, so if you’re remortgaging after a split with a partner and want a name removed or you’re adding a name to it, there will be legal fees payable upfront. The cost for amendments is generally £300.

Valuation fee

All lenders need to know the true value of your property as that’s their security. The valuation fee can cost up to £400. The vast majority of remortgaging lenders forego this fee though, so it’s free to you – in most cases. You don’t need to shell out for a homebuyer’s report or the like for a remortgage simply because you aren’t buying a new home.

Remortgage Fees And Costs In Conclusion

When remortgaging with bad credit there is usually a higher upfront cost due to the higher deposit required on most deals. There are always going to be added fees though so you need to factor in what your true upfront costs will be and what fees you may need to work into a new homeowner loan to cover the fees.

Early repayment fees and arrangement fees will be the highest, but the few hundred here and there will also add up.

If you have bad credit (your credit score is going down) and you currently have a good 1st charge mortgage, it could be a lower overall cost to consider bad credit secured loans as the bigger part of the debt would be at a lower rate. But it is best to not get to the stage where you have to release equity.

Other Remortgage-Related Pages:

How do remortgage fees compare with secured loan fees for homeowners in 2024?

When you study homeowner loans with bad credit history the fees are similar to fees added on to bad credit remortgages.

A Comprehensive Guide on Secured Loans and RIO Mortgages for the UK Resident

The financial landscape can be a daunting one. With an array of products on the market, it’s essential for consumers to be well-informed. For the UK resident, this guide focuses on two particular financial products: secured loans and RIO (Retirement Interest Only) mortgages.

Secured Loans: An Overview

A secured loan, as the name suggests, is a type of loan that is secured against an asset, typically a property. This means that if the borrower defaults on the loan repayments, the lender can take possession of the asset to recover the outstanding debt.

Advantages of Secured Loans:

  1. Higher Borrowing Limits: Due to the security provided, lenders often offer a larger borrowing amount compared to unsecured loans.
  2. Lower Interest Rates: The risk to the lender is reduced, so they often provide loans at competitive interest rates.
  3. Flexible Repayment Terms: Secured loans usually come with more extended repayment periods, making monthly repayments more manageable.

Potential Risks of Secured Loans:

  1. Risk of Losing the Asset: If you fail to meet the repayment terms, you risk losing the asset (often your home).
  2. Potential for Higher Overall Interest: While monthly rates may be lower, the longer repayment terms can mean you pay more in interest over the loan’s life.

For those considering a fixed interest rate option, there’s a resource on the Fixed Rate Homeowner Loan. It offers insights on acquiring a fixed-interest rate loan, providing stability in repayments and shielding borrowers from interest rate fluctuations.

RIO Mortgages: A Solution for the Older Generation

Retirement Interest Only (RIO) mortgages are a newer product on the UK market. Aimed primarily at older homeowners, typically over the age of 55, these mortgages allow borrowers to pay only the interest on the loan monthly, with the loan amount repaid when the home is sold, the homeowner moves into care, or upon their passing.

Why Consider a RIO Mortgage?

  1. Affordability: Since you’re only required to pay the interest each month, the monthly payments can be more affordable compared to a regular repayment mortgage.
  2. No End Date: Unlike standard mortgages with fixed terms, a RIO mortgage doesn’t have a set end date.
  3. Equity Release: It allows older homeowners to release equity from their homes without selling.

For older borrowers looking to explore their mortgage options, there’s valuable information on Mortgage For Over 70. It delves into the possibilities and considerations for mortgages for the over 70s, ensuring that age doesn’t limit your financial decisions.

Another resource worth exploring is Mortgages For Older Borrowers, which offers more details on mortgages for over 70s. It breaks down the intricacies and helps in making informed choices.

How Much Does It Cost To Remortgage

It’s a common question: how much does it cost to remortgage, so it ranges from a few hundred pounds for a valuation to several thousand for fees and broker fees?

If you want to save money you could consider houses for sale under 100k near me so you don’t need a mortgage or secured loan at all.

Navigating the Best Deals in 2024

While these products offer great opportunities, it’s essential to shop around and find the best deals that fit your circumstances. The Best Mortgage Deals 2024 resource provides insights into the best mortgage deals 2024 has to offer, ensuring you get the most value for your money.

For younger homeowners or those below the age of 55, wondering about equity release, the Release Equity In House Under 55 section provides information about equity release for those under 55. It’s a comprehensive guide that sheds light on the options available.

Trusted Institutions and Reviews

When venturing into the world of loans and mortgages, it’s always beneficial to research and go with trusted institutions. United Trust Bank Reviews offers a glimpse into customer experiences and the services of UT Bank. Such reviews can be instrumental in making the right choice for your financial partner.