Looking Out For The Small Print Extras In Your Next Mortgage
Posted by Foreclosure Prevention in FinanceWhen you are considering a new mortgage, there are a number of fees that lenders 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 mortgage tables in their basic form won’t spell them out. So when you are trying to compare mortgage rates through online charts, don’t forget to delve more deeply to see what hidden charges you might unearth.
To understand what these charges 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 charges.
Here’s some examples that you might want to be on the look out for when trawling through the mortgage tables in search of mortgage interest rates.
Exit Fees – if you do not keep the mortgage to the end of its term and instead complete it early then the building society may try to charge you an exit charge to cover their paperwork costs that are involved in completing 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 insignificant charges that don’t really add up to much in comparison with the figures involved in a mortgage, but some lenders have hiked up these charges to try to make more money. This is taking advantage of the small print saying that fees 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 typically about a couple of percentage points above the standard base rate. This is where the lenders make their cash through those customers that don’t try to change 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 mortgage charts.
Higher lending charge – over are the days of the 125% mortgage, or at least until the lenders forget how badly they had their fingers burnt this time around. Most of the mortgage charts show the best buy deals and have various hoops to jump through, such as not borrowing 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 charges – 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 expressed as an amount of cash or so many months’ interest. Quite often after the fixed or tracker rate is over there is a tie in period during which you cannot move from the standard variable rate without incurring this early redemption fee.
Save money in any sphere of your life – this is easy. Learn how to use car finance calculator properly.
Entries (RSS)