Watch out for hidden fees on mortgages

Finance Admin · #1 (**permalink**) 04-24-2006, 12:50 PM

Good article highlighting the problem of excessive fees at termination, especially when remortgaging your home:
http://www.thisismoney.co.uk/mortgag...&in_page_id=58

Quote:

The soaring fees are the industry's ruthless response to the rise of the 'rate tart', a name coined for people who switch their mortgage every few years to save money.

Last year, more than 1.1m people remortgaged for a total of £117bn. As homeowners are no longer paying huge interest costs, lenders have responded over the past two years by hiking up their charges, a study of the top ten lenders reveals.

Major lenders have been advertising apparently bargain home loans such as two-year fixed rates deals charging as little as 4.3%. But they have also been hiking up the small-print charges which wipes out many of the apparent savings.

These fees are on top of rising valuation charges, early redemption penalties, plus other fees ranging from photocopying to £35 for a telephone call. One lender compiled a list of 23 charges which it could impose, from £26 for a letter to £20 to send out a replacement mortgage statement.

Belson17 · #2 (**permalink**) 05-09-2006, 12:50 PM

You usually don't have a problem with reputable banks and mortgage companies. They usually disclose all fees. But be careful of Mortgage Brokers. I've found that they have a tendency to be more shady. Make sure you get all fees in writing before you do business with them.

lyricb · #3 (**permalink**) 05-16-2006, 10:32 PM

When I was working in mortgages it was getting to the point where people would complete a refinance and then turn around and get another one, even if the rate was only a quarter of a percentage lower. People need to realize that a refinance is a whole new loan, and that includes all new closing costs.

Green Diva · #4 (**permalink**) 06-18-2006, 04:35 PM

I wouldn't say that mortgage brokers are shady per se (they do after all have to make a living), BUT they do add on fees that may not always be necessary.

brian · #5 (**permalink**) 07-01-2006, 09:26 AM

Mortgage brokers in the UK have been slated over the past couple of years by the Financial Services Authority - the watchdog for the sector. One main complaint is significant errors when describing costs.

More on that here:
http://www.propertywatch.org.uk/mort...harges-66.html

ctabuk@gmail.com · #6 (**permalink**) 09-08-2006, 09:37 AM

Greetings Forum, I'm David -I don't think the FSA are going far enough on fee charging. In our market (RTB) £3,000 are being charged and they only sell high proc fee loans. Rip off time.

triumph · #7 (**permalink**) 09-09-2006, 09:16 PM

My parents just went through this. They refinanced coming off an adjustable rate kick-in and they got hit with a substantial amount of fees. It still made sense to do the refinance but it was a rip-off in fees.

DarlersPT · #8 (**permalink**) 11-24-2006, 04:55 PM

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