Mortgages

[emma123456]

Just shopping around for a mortgage.

One deal has a significant arrangement fee (covering valuation, legals I assume). When is this normally paid? If the chain collapses and we don’t move, do we still pay?

Thanks. Emma

Depends on the product, sometimes upfront, sometimes it can be added to the total loan so you wouldn't be liable until completion but you are best speaking to your mortgage advisor to check!

Depends on the product, should all be detailed and clearly explained by the broker. Arrangement fee doesn't necessarily include val & legals.

The fee is normally payable upon submitting your full mortgage application. Even if you decide not to take that mortgage product, because of chains collapses, or that you want to get a different, you might still be liable for the fee. Your bank should, however, tell you this and I remember our bank checked with us several times to ensure we understood this we were applying for our last mortgage.

We had to pay ours on officially submitting the mortgage application. This was with HSBC and it was £795 for the arrangement fee, and it didn't include the valuation or legal fees. Valuation was charged separately at the same time (another £595) and the legal fees were paid through our solicitor's final invoice (was about £300 IIRC)

My advice would be to go through a mortgage broker. I had a brilliant deal this past month. Nationwide mortgage, no fees, £500 cashback, 1.79‰ fixed for 5 years and the brokers fee was £245.

We are looking at HSBC who have a deal for 1.36% fixed for 5 years but it’s not available through a broker so we have to do the leg work ourselves. There is a fee of £1499 on this one.

I would use a calculator. With those fees it may be cheaper to go with a higher rate with no fee.