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Can someone help explain Mortgage additional costs
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theAnarchist
Posts: 55 Forumite
Hi can someone help to explain where additional costs are factored in?
The costs they quote are sometimes said to be :
Paid up front
Added to the mortgage
Or paid at the end.
When working out my monthly payements on a fixed term. Do I add these costs on to my mortgage? And then divide by the number of repayments to get my monthly figure.
Obvioulsy the monthly repayments they quote must exclude additional costs. Or do they have to include the additional costs in the repayment price?
Thanks
The costs they quote are sometimes said to be :
Paid up front
Added to the mortgage
Or paid at the end.
When working out my monthly payements on a fixed term. Do I add these costs on to my mortgage? And then divide by the number of repayments to get my monthly figure.
Obvioulsy the monthly repayments they quote must exclude additional costs. Or do they have to include the additional costs in the repayment price?
Thanks
0
Comments
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Do I add these costs on to my mortgage?
Yes, if you dont intend to pay for them up front. However, you need to remember that you could end up paying for them for 25-30 years if you dont.
And then divide by the number of repayments to get my monthly figure.
No. You would be forgetting interest if you did that.Obvioulsy the monthly repayments they quote must exclude additional costs.
They dont unless you tell them to.Or do they have to include the additional costs in the repayment price?
They would barely register in the APR due to the lenght of term they are spread over. Problem is that some people buy new mortgage deals every few years and dont repay the costs each time and that means they end up wiping out a lot of the benefit of buying deals in the first place.
A good yardstick is to factor in the costs of the deal over the term of the deal only. Not the whole mortgage.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Are you saying that the repayment prices they quote on mortgage comparion sites incorporate the costs?
I,m going to be taking out a 2yr fix.
So its probably best paying for them upfront as I don't pay interest on them.
And just factor them over the 2yrs.
eg:
Monthly repayment of 24 x £420
Costs £800 paid upfont / 24 = £33.33
Actual monthly payments then £453.330 -
deleted..misread post0
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VIGILANT22 wrote: »no that wouldnt be yr monthly payment because the 800.00 would be over the term and not 2yrs
The OP's saying he'd pay them upfront and so is just factoring them in0
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