Fees - added to mortgage or paid up-front?

r_holmes22

As the title says, do lenders typically add the arrangement [and other associated] fees to the amount you borrow, or do they normally expect you to pay them up-front.

I'm basically trying to work out how much money I'll have in the bank for a deposit on a house (I'm moving home) once the solicitors, estate agent and other parties (mortgage lender?) have taken their cut. I know you pay the solicitors and estate agents up-front but am less certain about the mortgage lender. I don't remember having to ferret around down the back of the sofa for a spare grand or so when I've remortgaged in the past, but I wonder if it is different for moving home?

kingstreet

Varies from lender to lender and product to product.

We advise our clients to add to loan, repaying soon after completion within any early repayment penalty free allowance, just in case anything goes wrong.

amnblog

Most lenders give you the option to add.

A typical fee is £999

I would suggest if that is a deal breaker you should down scale your ambitions.

amnblog

kingstreet wrote: »

We advise our clients to add to loan, repaying soon after completion within any early repayment penalty free allowance, just in case anything goes wrong.

How are you going to handle that one on April 27th KS?

kingstreet

amnblog wrote: »

How are you going to handle that one on April 27th KS?

God knows.

Ask me again on April 26th.

We do document it as if the client is adding it and interest is payable ad-infinitum for the whole term, just to be on the safe side.

amnblog

4.6A.1 in case you are bored one evening

kingstreet

amnblog wrote: »

4.6A.1 in case you are bored one evening

I don't get time to be bored.

I'm only posting on here these days because it makes more sense to stay in front of the computer and phone rather than move away from them and have to shuffle back and forth...

I did about ten hours over the weekend, plus a new application visit and I'm working from 6.30 most mornings.

getmore4less

Add to loan and borrow less

no need to overpay.

neneromanova

What's happening on the 27th?

kingstreet

neneromanova wrote: »

What's happening on the 27th?

The new rules on mortgage advice and arrangement known loosely as "MMR" from the FSA's mortgage market review start on 26 April.

getmore4less

Seems to be a non problem, just invoke 4.6A.2

If the customer has the money and wants to roll them in you just borrow less if they don't have the money then they have to actively chose to add them anyway or borrow more and have a smaller deposit.

4.6A.1 R A mortgage lender may not offer a regulated mortgage contract to a customer on the basis that fees or charges of any kind (receivable either by the mortgage lender or another party) are automatically added to the sum

advanced.


4.6A.2 R A firm must not undertake any action that commits a customer to an application for a regulated mortgage contract where a fee or charge of any kind (receivable either by the firm or another party) is to be added to the sum advanced under the regulated mortgage contract, unless the customer has
made a positive choice to add the fee or charge to the sum advanced.