Five Remortgaging Fees You'll Want To Keep Under Control

If you are looking to fix your mortgage payments, borrow some additional money for home improvements or a new car or you simply want to save money on your mortgage, a remortgage could be the perfect solution for you.

At first glance, remortgaging might seem like it can save you a considerable sum in terms of your monthly payments. However, there may be extra, unforeseen costs that accumulate as part of the remortgaging process. It is very important that you take any additional fees and charges that you might incur into account. These charges might be the difference between profit and loss on your remortgaging. They might significantly reduce the total savings you make by switching your home loan, thus negating the whole process in the first place. Here are five fees to watch out for when remortgaging.

Valuation Fee: The valuation is one of the first steps in any remortgage. The lender needs to confirm the market value of your home in order to ensure they aren't lending too much and that your remortgage fits their 'loan to value' criteria. In addition, they want to make sure that your home is in satisfactory condition and that there are no structural problems with it.

Valuing Your Property: Just as when you originally took your mortgage, the new mortgage lender will require the property to be valued in order to ensure that the property is sufficient as security for the mortgage loan. Some lenders may actually pay the fees for a valuation, while others will require you to pay for it yourself.

Broker Fees: An increasing number of homeowners use mortgage brokers to assist them with a remortgage deal. Brokers are useful because they have a wide knowledge of the market and are able to shop around on your behalf for the best deals from all the lenders in the UK. Whilst this can be very useful and whilst some brokers take their fee from the mortgage provider, others will present you, the homeowner, with some quite excessive fees for their services.

Admin Fees to Current Lender: Even if your remortgage lender is offering a fully 'fee free' deal you may still end up paying some charges as part of the process. This is because your current lender might apply some costs. Lenders often charge 'closing' or other administration fees when you redeem your mortgage to cover the costs of them closing your mortgage amount. You'll often see these fees on the redemption statement you receive from your current lender.

Arrangement/Booking Fee: Most remortgage fixed or tracker rate deals come with some sort of booking or application fee. Often these can be several hundred pounds or, in some cases, a percentage of the mortgage amount.

Booking fees are often payable when your remortgage application is submitted. If your remortgage application is declined or you decide not to proceed, you may not get a refund of your booking fee.

Conveyancing & Legal Fees: Conveyancing is the term used for a solicitor's role in the mortgage lending process. The solicitor deals with all of the legal aspects of the remortgage, including dealing with Stamp Duty Land Tax if applicable, land registry and checking that the ownership of the property is legal and valid.

Whilst many lenders will meet the cost of the basic remortgage legal work, others may require you to pay these fees. Indeed, if there is any additional legal work to be carried out - for example a second charge to be postponed or a transfer of equity - you are likely to have to pay for this.