Application Arrangement Fees - Mortgages!

UK007BullDog

Yes David, You are right, my mistake. Will change the post.

Kaz64_2

Yes, thank you bulldog. Have been away, and have just read both Marky's and your posts on the subject. Think I will leave it as it is, and do as you said, and do some overpayments when I can.
Thanks to you both.

UK007BullDog wrote: »

Marky_Mark did explain it very well a few posts up.

I am a bank mortgage adviser. I get very few people to pay the fees upfront because they have the savings to do so. Having said that "our" fees are around £0 to £1600 max.

I prefer to add the fee to the loan because:

1. Declined mortgage, fees will get recharged from us anyway.
2. House purchase falls through:
A. Prepaid fee - you loose the fee
B. Added to loan - you are scottfree and have not lost anything
3. Once the mortgage has completed I advise my customers to make a couple of lump payments on top of their regular monthly mortgage payments which will pay off any added fees and save interest on those fees in the long run.
4. I always advise my customers to take advantage of the overpaying facility to reduce the mortgage amount more quickly.

If you check out the high street there are some very good deals available right now especially for those remortgaging, some have no fees at all and the rates are not bad either.

A warning for those thinking of SVR trackers: On the last Bank of England rate reduction only 27% (or thereabouts) passed the reduction on to their customers and about 2/3rd of them did not even pass on the whole reduction. So do not bank (sorry for the pun) on getting a reduction just because the BoE reduced rates. Because the overall problem is still there: Not enough money in the system for the banks to give away to borrowers.
Which has been explained very well by brokers on this thread.