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Lipsticklady

Hi i am soooooooo nervous!
I am getting a 100% mortgage to purchase a house at £102,500. I have been offered a fixed rate repayment mortgage with Mortgage with 'Accord Mortgages' at a rate of 5.39%.


On the fee page there are the folowing:
1) product arrangement fee £495.00 (which is added to the loan)
2) Basic valuation fee £260.00
3) Current redemption administration fee on full repayment of loan before end of term £199.00
4) CHAPS Fee- for electronic transmission of loan amount to our legal adviser paid at application-£30.00
5) Legal Fee Quote -£117.00

What is 3) and 4)???? Bit unsure about these and would appreciate any comments.

We are getting this through a broker who will receive a proportion £333.12 for arrangiung this mortgage deal.

Am i getting a good deal? i have to sign the papers this evening and feel sick with nerves!

Woby_Tide

3) is just the fee you'll pay if you redeem the mortgage before the 25 years is up, i.e. if you choose to move to another bank.building society you'll pay £199 for 'admin' to close your deal (there is a topic concerning Alliance and Leicesters redemption admin fees on the mortgage boards if you want to take a look)

4) CHAPS is just an electronic money transfer, much like BACS for your wages, it's just quicker hence the charge. All it means is that on the day you complete your purchase the lender will transfer your mortgage money to your solicitor, who ini turn will send it on to the people you buy from

Lipsticklady

so after the three years is up and we decided to move we will have to pay £199.00 to do so???

Woby_Tide

not always if you move house, just if you move lenders, though it all depends on the lender, some waive the charge if you take out another deal with them, others don't. As per the A&L topic, it's seemingly more just a way to load up charges on the mortgage whilst still offering a tempting 'headline' rate

GDB2222

I just picked up on the word 'current' describing the admin fee. Who decides if it goes up, and is there any limit on how much it goes up? What does your adviser say (in writing) about this?

What does the small print say? Always read the small print. The smaller it is, the less they want you to read it! If necessary buy a magnifying glass - I have one on my desk as I write this.

GDB2222

BTW, is it usual to have a product arrangement fee? £500 is a bit steep. Who gets that, the adviser? I took my mortgage out with the Halifax in 1997, and they paid me to do so, not the other way around. Admittedly, not 100% loan, though.

At 100%, is there a mortgage indemnity insurance? How much is that?

Woby_Tide

more or less every lender charges an arrangement fee now, £500 is actually reasonably cheap in the current market, some lenders may offer cashback or fees free but as with all mortgages weigh up all the fees with the deal you get, a more expensive rate may work out cheaper once fees are included

Gem_

Yes £495 is pretty steep for an arrangement fee but if you want to get a 100% loan then the choices and the deals will not be as good as for a 90% or lower loan.

As a 100% lend you are really high risk to them so they will never offer you the best deal on their books.

You may find there are savings if you avoid the broker and call the bank directly for your deal. As they dont have to pay broker commisson they may not charge such a large arrangment fee? This is what I did and I managed to get the fee removed for the same deal as I had through the broker.

£117 is a great price for legals though.

Hope that helps

Gem

Lipsticklady

In the additional features section they have stated as incentives :

1) Higher Lending charge-we will pay the higher lending charge of £3,075.00
2) Following the completion of your mortgage we will refund the standard valuation fee of £260.00. However this excludes
-any 2nd/subsequent valuations AND
-the cost of any homebuyers surveys or building (structral) surveys where such cost exceeds the standard valuation fee.

Lipsticklady

Just asked the mortgage advisor;

"I just picked up on the word 'current' describing the admin fee. Who decides if it goes up, and is there any limit on how much it goes up?
£495 is apparently quite steep for an arrangement fee. Is this primarily due to the fact we are receiving a 100% mortgage????
If you could just clarify these points and get back to me ASAP I would be grateful."

He replied:

All lenders now charge high application fees and the £495 is a fixed fee.It is not necessarily down to the LTV that detemines the level of the fee,it is how the lender perceives how good the rate is that they are offering compared to the marketplace and charge accordingly.

Do you think he's skipping arount the admin fee question???

meanmachine_2

No that sounds like a straightfoward answer to me.

Banks are getting more sneaky in their clawing back of monies lost through customers becoming more adept at switching mortgages.

It's all very well sites like Martin's making people more savvy, but banks always find a way to screw the little guy.