Add Arrangement Fees to Mortgage

ziof3ster

GMS wrote: »

Look at the amount of borrowing so 150k in this case. The fee is 5k.

150k against 200k value is 75% LTV. This is how a product will be selected so you would be in a 75% product.

Adding the 5k fee would take your actual LTV to 77.5% but if the lender allows fees to be added without affecting LTV you would still get a 75% product.

Your arrangement fee is based on your borrowing (in the case of a % fee) not the borrowing plus the fee.

You really should look at alternative deals with a fixed fee for comparison. Paying 5k just to secure a low rate may not be the best overall.

Hi,

so in this case (the lender allows to add the fees to the sum borrowed), my rate will be calculated on 155k but my deposit is still 50k?

(I'm asking all this question because from my broker calculation it seems she is not very good at math, or a bit confused about the overall thing...and because I'm new on this is creating me a superconfusion!!!)

Thanks
Gio

GMS

Which lender is it?

What has your broker said?

Have you been given a Key Facts Illustration?

Often the lender will allow fees to be added without affecting the LTV.

Your TOTAL borrowing will be your actual LTV

Your LTV for product selection purposes could be the loan without fees.

ziof3ster

GMS wrote: »

Which lender is it?

What has your broker said?

Have you been given a Key Facts Illustration?

Often the lender will allow fees to be added without affecting the LTV.

Your TOTAL borrowing will be your actual LTV

Your LTV for product selection purposes could be the loan without fees.

Hi GMS,

sorry I'm not expert about this matter this is why on here.

I still didnt get, in case the lender allows fees to be added to the Morgage (let say TMW for example)

200k property value
50k deposit so 75% LTV

my product has got a fee of 5k that is possible add to the money borrowed.

It will make, in this case, my deposit still 50k and my amount borrowed 155k ??? (so I will pay interest on the 5k in the 25 years of mortgage period).

My concern in particular is focussed on the deposit, if it changes (to keep the LTV at 75%) or not.

Thanks
Gio

GMS

Your broker should be the expert in this for you and should explain it all so you fully understand.

TMW will allow the 5k to be added above the product LTV so you will have a 75% product and a 77.5% ACTUAL LTV.

You will pay interest on the 5k fee as you will with the 150k loan.

Your deposit will not be affected by the 5k fee. You will still need 50k to borrow 205k (inc 5k fee)

Once again I seriously recommend you look at alternatives. The fee is huge and you need to make sure you will recoup the cost of it.

Which product have you gone for?

Yorkie1

Info from OP's other thread may assist with the fuller picture:
https://forums.moneysavingexpert.com/discussion/3479249

ziof3ster

Yorkie1 wrote: »

Info from OP's other thread may assist with the fuller picture:

Thanks Yorkie1

Yes I'm looking for a BTL for first time landlord on a 75% LTV.

I was adviced by a broker (not whole market) that there are only 3 product available from the following lenders

TMW
Natwest
Northernrock

of course because the broker is not a whole market, I'm have a look locally for a IFA whole market BTL product that suits me.

Upfront, to clarify some doubts (I'm pretty new on this topic) I'm using this (have to say) fantastic forum!!!

Thanks
Gio