Does paying your product fee count as an overpayment?

beecher2

It looks like I can make less of an overpayment than I expected as my product fee was added to my mortgage and then immediately paid by myself. It isn't a big deal, but does this the normal way this is done?

Senior_Paper_Monitor

Thinking about the way the contrcat is written - yes (but that is just my interpretation rather than previous experience)

wurlycurly

I was offered a choice to pay upfront or have it added to my mortgage.

I was advised it was best to add it to the mortgage as the fee is payable as soon as the mortgage is offered and is non-refunable so if anything happened and the sale were to fall through I wouldn't be able to get my fee back, but if I added it to the mortgage I wouldn't have paid it, therefore wouldn't be out of pocket.

luckyfool

Makes sense.

Some lenders also allow the fee to be deducted from the loan (meaning you pay the fee to the solicitor along with the deposit prior to completion). This would also get around that issue.

beecher2

Definitely something for people to check then, if they're making a 10% overpayment in the first year of any deal. It isn't something I would've thought of.

getmore4less

beecher2 wrote: »

It looks like I can make less of an overpayment than I expected as my product fee was added to my mortgage and then immediately paid by myself. It isn't a big deal, but does this the normal way this is done?

The way to do this is if you have the money is to borrow less and have a slightly bigger deposit, then add the fees to the mortgage.