A remortgage loan product is just that, a product. It should never be thought of as a service which will not have any accompanying fees with it. A profit on every loan product it sells is what lenders are always attempting to better. Whether it is a bank or lending institution, the goal is to make as much income as possible from interest and additional fees, on mortgage loans or remortgage loans. So, when calculating the cost of a remortgage, fees to start the process should be included. These initial fees can be described and elaborated on by questioning any remortgage loan professional. Fees associated with a remortgage loan are as follows:
Exit Fees
When the remortgage process gets underway, an existing mortgage loan is still in place. There is an outstanding balance on that existing loan product which needs to be paid off. Paying off the outstanding balance is part of what are referred to as exit fees. Exit fees are sometimes referred to as Early Redemption Charge, or ERC. Simply checking with your current lender will enable you to understand what the outstanding balance is and then it can be taken care of. The next step in the remortgage loan process cannot be started until the outstanding balance on the original loan is paid off.
Arrangement Fees
Fees which a bank or lending institution charges to start the remortgage process with a potential borrower are called arrangement fees. There are several members of a mortgage loan team which typically attend to a borrower’s needs once the process begins. There are several members so no steps get missed during the entire closing process. Hours of the special team must be paid for and the arrangement fees assist in doing just that. Sometimes lenders throw arrangement fees into the remortgage loan package at no cost.
Legal Fees
A legal team from a local law firm typically oversees the legality of the proceedings of a remortgage. The team makes sure the documentation is accurate and no details are left out. Since the signed contract will form a legally binding agreement, the legal team is imperative. The legal team is necessary and that comes with a cost. The legal team usually gets called in and their expertise is utilized whenever a new mortgage product is sold. An individual known as a conveyancer is typically the leader who is in charge of overseeing the legal protocol is followed.
Survey Fees
Survey fees include fees which have been created by an appraiser to place a value on the property which is being remortgaged. In order for the lender to determine a loan amount, the lender must know what the property is worth. The absence of an appraisal would not allow the lender to establish a fair loan amount. Sometimes lenders use free survey fees as a way to attract potential borrowers to their place of business.
Finally, remortgage loans must always have associated fees accompanying new remortgage loans. It would be impossible for lenders of any kind to stay in business if they had no additional fees due to an imbalance in overhead costs of the lender and repayment of the borrower.
