(Hidden) costs of Mortgages

Maexchen

Hi, I’m buying a flat (yeah!) for which I need a mortgage which is a bit scary (booh). I’m using a mortgage adviser as I thought that would make things easier and run smoothly. The reality is that I feel that I should have done better without. She sent me two different mortgages to consider and I asked what the costs over the lifetime (5yrs) of the mortgage are. Only after asking multiple times she told me about exit fees on one of them. While £65 isn’t much in the grand scheme of things it makes a difference. And I think that if this is part of their job they should mention ALL the charges.
In the end i went with HSBC and a fee of £999 plus I was told £30 for the drawdown (and a free standard evaluation)

I have now received my offer and it list £295 conveyancing fee that nobody mentioned to me previously and £275 registration fee (that again nobody mentioned - my solicitor has already provisioned for a land registry fee but I guess this one is different)

So my questions are: are those charges normal? Why are they mentioned nowhere? And is there anything else to expect?

Thanks

csgohan4

are these charges form the solicitor or the lender please clarify?


If from the solicitor, why did you not get a breakdown of costs before you engaged them?

Dean000000

yes all sorts of 'hidden' fees are normal, and mortgage companies by their nature set out to 'hide' the true cost of their offer... (though - they arnt hidden - just not headlined...for obvious reasons)


If they didn't, it would be really very simple wouldn't it? Lowest % over product life.


Though, fact is, there isn't a 'best or worse' mortgage, as everyone needs something slightly different.


Some can suffer the high fees for a low %, some are better off with a higher % and lower fees.


For your purposes - you are right, and need to look for life cycle..


Im an amateur - so amateur tip from me....


Work out what your balance (or amount owed to mortgage company) will be at the end of the product deal (incl exit fees if applicable) Focus on what you owe at the end, not what you are actually borrowing, or what fees are attached...if that makes sense.

Maexchen

Hi @csgohan4 they are costs by the lender (HSBC), I do have a full breakdown of the costs of my solicitor and I have explicitly asked the mortgage advisor in writing if there are any other costs and these weren’t mentioned.

kingstreet

What is the point of picking a lender for its "cost for life" when there is every chance when the five year fix ends, you will select a new deal or move to another lender.

Our software takes into account the interest costs, fees and charges, amount remaining at end of fix and calculates "true cost" over the initial period.

This is how a product with a £65 exit fee may still end up being more cost-effective.

BTW the conveyancing cost shown on an ESIS/KFI is the cost of work done for the lender by your chosen solicitor and is part of your solicitor's quoted costs and it not a separate charge.

£275 registration fee? That sounds more like the Land Registry, which again should be included in your solicitor quote as it is not a mortgage cost. Alternatively, are you buying a newbuild?

haras_nosirrah

some lenders include solicitor charges on the offers. These will be what your solicitor charges not in addition to

kingstreet

I have an HSBC offer in front of me now.

The £295 is the lender conveyancing fee which will be included in your solicitor's quotation unless you chose not to use an HSBC panel solicitor and HSBC had another firm act for it at your expense and the £270 (on my copy) Land Registry fee.

Maexchen

@kingstreet, of course I’m talking about the lifecycle costs over the initial terms only and I’m well aware that it may be beneficial to have a fee payment rather than the lowest rate (and/or having a survey paid for etc.) . I have made all these calculations and one offer was about £500 cheaper over the five years, so I picked that one. However if I now had to pay £295+£275 it wouldn’t have been. Now over the whole term of my repayment this does not really matter. It’s more about principle.

But then you seem to imply that these costs are actually not in addition but may already have been included in my solicitors quote. That is really the question I am asking. Are they asking me to pay a fee they haven’t mentioned before or are they just stating general fees that I am paying my solicitor.

foxy-stoat

Maexchen wrote: »

While £65 isn’t much in the grand scheme of things it makes a difference. And I think that if this is part of their job they should mention ALL the charges.

if £65 makes a difference then property ownership isn't for you.

Maexchen

Interesting tone in this forum

kingstreet

Maexchen wrote: »

@kingstreet, of course I’m talking about the lifecycle costs over the initial terms only and I’m well aware that it may be beneficial to have a fee payment rather than the lowest rate (and/or having a survey paid for etc.) . I have made all these calculations and one offer was about £500 cheaper over the five years, so I picked that one. However if I now had to pay £295+£275 it wouldn’t have been. Now over the whole term of my repayment this does not really matter. It’s more about principle.

But then you seem to imply that these costs are actually not in addition but may already have been included in my solicitors quote. That is really the question I am asking. Are they asking me to pay a fee they haven’t mentioned before or are they just stating general fees that I am paying my solicitor.

The conveyancer cost is included simply to ensure the accuracy of the APRC and is not a direct cost unless you chose separate representation. You will find it visible on every lender's illustration.

The Land Registry fee would be payable regardless of chosen lender or solicitor.