Let's be honest: no one likes to pay a fee if they don't have to. When it comes to mortgages, where the costs can be high enough, it can seem like a good idea to avoid fees. But can you get a mortgage without having to pay any fees? Almost certainly not, is the answer.
Even if you don't have to pay a fee for one part of the mortgage process, you probably will have to pay one for another.
When you want a mortgage, you have to pay fees. Many lenders charge an arrangement fee (also called a booking fee) when they give you the mortgage amount for the first time. At the time of writing (7 August 2007), all of the top 10 three-year fixed-rate mortgages for people moving include a start-up fee. For a GBP150,000 mortgage, these costs range from GBP215 to GBP999. You will also need to get a property valuation (or survey), which costs money but is not technically part of the mortgage. Even if you pay for the survey on your own, you may still have to pay a "valuation administration fee" to cover the costs of the lender's administration.
If you borrow a lot of money compared to how much the property is worth (say, more than 90 percent), you might have to pay a "higher lending charge."
There will also be legal fees, though in some cases, lenders will pay for these when a mortgage is refinanced.
If you decide to change your mortgage before the end of the special deal period, you may have to pay an early repayment charge.
Even if you avoid all of these, you may still have to pay a "deeds release fee" when you switch your mortgage to a new lender.
So, all of this adds up to the fact that fees are now part of the mortgage costs that a lender charges. If you want to make sure you're getting the best deal overall, use a site that compares the real costs of all mortgages, including all the fees you might be charged.
