Uncovering The Hidden Extras In Your Future Mortgage

When you are considering a new mortgage, there are a number of fees that building societies might not spell out as much as borrowers might like them to. They are always mentioned at some point and can eventually 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 best mortgage rates through online charts, remember to delve more deeply to see what hidden charges you might unearth in the small print.

To understand what these fees are going to end up costing you, it is worth either asking an independent financial advisor for a model or at the very least get a detail of what the total repayments will be, including all penalties.

Here’s some examples of what you might want to be looking out for when trawling through the mortgage tables in search of best mortgage interest rates.

Exit Fees ? if you do not maintain the mortgage to the end of its term and instead repay it early then the lender may try to charge you an exit charge to cover their paperwork costs that are involved in ending 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 low fees 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 bank 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 swap 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 ? behind us 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 lending more than 75% of your new house’s value. If you are borrowing more than the cutoff limit, then the bank may impose 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 displayed as an amount of cash or so many months’ interest. Quite often after the tracker or fixed rate is over there is a tie in period during which you cannot change from the standard variable rate without incurring this early redemption penalty.

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