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Offer of loan help
the4horsemen
Posts: 10 Forumite
I wonder if anyone can help me a query I have on my offer of loan? I will take this up with my mortgage lender tomorrow but they are closed for the day
Im looking to purchase a house for £150,000 of which 15% will be my deposit of £22,500 and therefore will borrow £127,500. In the cost there is also an arrangement fee of £995 which I have elected to pay up front rather than add to the loan and a CHAPS fee of £30.
However the offer of loan states upon completion the net amount to be released is £126,475 and not £127,500. I'm confused by this because if the £995 and £30 listed above are admin costs for the lender why have they been deducted from the loan amount? From how I see it, it means that even though I pay £22500 + 995 + 30 up front, the seller will only receive £148,975 and not the full £150,000 if the lender keeps these two fees.
Am I missing something obvious here? I don't want to end up paying the £995 and £30 twice.
Im looking to purchase a house for £150,000 of which 15% will be my deposit of £22,500 and therefore will borrow £127,500. In the cost there is also an arrangement fee of £995 which I have elected to pay up front rather than add to the loan and a CHAPS fee of £30.
However the offer of loan states upon completion the net amount to be released is £126,475 and not £127,500. I'm confused by this because if the £995 and £30 listed above are admin costs for the lender why have they been deducted from the loan amount? From how I see it, it means that even though I pay £22500 + 995 + 30 up front, the seller will only receive £148,975 and not the full £150,000 if the lender keeps these two fees.
Am I missing something obvious here? I don't want to end up paying the £995 and £30 twice.
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Comments
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The lender will deduct it's fees from the amount it releases to the solicitor.
You will pass the solicitor the money you would have paid the lender.
The net result is that the solicitor has the correct amount of money to complete the purchase on your behalf.0 -
This is normal.0
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Thrugelmir wrote: »The lender will deduct it's fees from the amount it releases to the solicitor.
You will pass the solicitor the money you would have paid the lender.
The net result is that the solicitor has the correct amount of money to complete the purchase on your behalf.
Surely someone will be £1,025 if this is correct? Either the lender or the seller?
I have no problem in making up the £1,025 to pay the seller but then the lender would be short of their admin charges?0 -
Have you paid the product fee and CHAPS fee upfront?
If yes, the advance is wrong and should be recalculated.
If no, it is deducted from the advance and you increase the amount you pay your solicitor by £995 + £30 so the lower amount from the lender and the higher amount you have paid your solicitor makes up the purchase price.
If you added them to the loan, you would not have to do this, would you?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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