Many Mortgage Fees

Exit fees are not the end of mortgage charges! MoneyExpert.com analysis reveals another seven possible fees!

Mortgage exit fees may be on the way out as a major problem but borrowers still need to focus on fees. Analysis by MoneyExpert.com* shows you could still be hit with up to seven different types of charge relating to your mortgage.

And theoretically the combined total average cost of the seven other fees is £917 – not including the application fees levied for fixed rate or discount deals.

Banks and building societies have slashed exit fees – charged for ending your mortgage and moving to another lender – following a clampdown by the Financial Services Authority. The cuts have opened the doors to millions of mortgage customers to reclaim overpayments of between £100 and £200.

However MoneyExpert.com is urging borrowers to keep a close eye on other fees in case they are unaware of alternative charges they may be liable for. Its analysis shows mortgage lenders’ contracts allow them to impose a range of other fees.

The seven charges, listed in detail below, relate to anything from valuations to reinspections, releasing property deeds to your solicitor and even administration. Average fees vary from £29.90 for transferring funds to a bank account to £344.59 for a homebuyer survey.

Sean Gardner, Chief Executive of MoneyExpert.com, said: "Borrowers may be delighted to be recouping some of the extravagant exit fees they’ve paid recently, but they’re far from out of the woods given the array of other costs lenders can impose.

"It seems that when it comes to mortgages you’re rarely free from an extra levy. Mortgage companies will find other ways to generate revenue and fees for a range of administrative tasks are one way.

"Consumers may have won a round on exit fees but they can still lose out if they don’t keep a watch on other fees. Generally you may be able to negotiate a reduction in these fees if you are vigilant. Lenders want your business so remember you don’t have to accept their terms."

MoneyExpert.com’s analysis shows eight possible charges, including exit fees, and has provided a checklist for borrowers with a brief explanation and average cost**:

1. Exit fees – average current cost £136.45 before cuts come into effect – also known as sealing fees or redemption fees, charged for redeeming your mortgage early or for moving to another mortgage product
2. Valuation fees – average minimum cost £191.36 – charge for a formal valuation of your property. Costs rise depending on the size (and therefore value) of your home
3. Homebuyer fees – average cost £344.59 – fee for completion of a more thorough survey than the mandatory basic valuation survey. Recommended by the Royal Institute of Chartered Surveyors
4. Reinspection fees – average cost £57.85 – charge for a revaluation of your property, normally takes place if you refurbish your home or make small, basic extensions
5. Administration fees – average cost £107.61 – fee for associated admin work (eg. filling in forms, compiling documents, research, financial transactions, etc.) that can be added to a variety of functions performed by the lender
6. Deeds release fee – average cost £71.73 – charge for returning your deeds forms (documents declaring ownership of a property) to your solicitor. Can be known as a discharge fee
7. Porting fee – average cost £117.86 – quite rare, especially if you don’t borrow additional funds. Charge for transferring your mortgage to a new property in the process of moving home
8. Telegraphic transfer fee – average cost £29.90 – electronic funds transfer fee if you request this form of transaction upon completion of your mortgage

Sean Gardner added: "Nobody would expect to incur all eight fees at once, but it is perfectly reasonable to expect lenders to pay the majority of these fees at some point. We all move home and most of us will complete our mortgage, so homeowners should be aware of the potential extra costs.

"There are providers out there who won’t charge you. With fees entering the spotlight they will become increasingly popular to borrowers looking to keep the cost of moving as low as possible."

MoneyExpert.com recently reported how banks and building societies have capitalised on the appetite for fixed rate deals as homeowners look to avoid increased monthly repayments caused by interest rate rises. The website announced that that the average fixed rate application fee has increased by 18.5 per cent from £494 to £585 since the first Bank of England rate rise in August 2006.

MoneyExpert.com offers a unique service which enables people to find the financial products which best meet their specific needs, and which they are more likely to be successful in being accepted for. It includes exclusive research conducted by MORI, which reveals providers’ service levels. This information is married up with a financial database which lists the products suited to the customer. For the first time, people can review a product’s price, features and also the level of service offered by the provider to enable them to make a more informed choice.

To compare mortgage offers available to you today at MoneyExpert click here

MoneyExpert.com aims to demystify the complex world of personal finance, and to help inform customers of the choices available. The service can be found at www.moneyexpert.com

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