Mortgage Fees - How Can I Find Out What They Mean?

Margaret_Skinner

I've just applied for a mortgage and the details have now come through in the post. A product fee was mentioned in discussions and I don't remember other fees being discussed - however I know generally there are hidden fees in these things so I was expecting other ones when the documentation came through - and wasn't disappointed!

However there is one which I need to check on. I have e-mailed my mortgage broker to get her to explain it but wondered if anyone on here could help as well. The fees I've been quoted are:

Product fee - £299.00
Valuation fee - £355.00
Deeds despatch fee - £50.00
Legal fee to conveyancer - £117.50

They all make sense apart from the Valuation fee - can anyone enlighten me as to what this means or refers to? I got my own survey done on the house I put in an offer for and e-mailed the mortgage broker with the valuation amount so this fee is flummoxing me.

dan1979

That's a valuation for the benefit of the lender, they will send an approved valuer round to determine if they want to lend on the property.

Dan_Collins_2

Dan is correct, all lenders will want a valuation carried out on behalf of the lender to establish that it is suitable security for the loan.

You can ignore the legal fee as this will be quoted to you with your solicitor fees. The lender has to give you an example.

The deeds dispatched fee is when or if you leave them they will dispatch the deeds to you, a new lender or solicitor. This fee can go up or down and every year the lender will issue you with a list of different admin charges.

The product fee is for the pleasure of having a fix, tracker or discounted product rather than the lenders SVR.

Margaret_Skinner

Thank you guys - I appreciate your help. Still think that £355 is a bit steep but at least I know what it means now!

dan1979

Just to make you feel even better, the valuation will cost the lender about a third of that amount.

dunstonh

Margaret_Clark wrote: »

Thank you guys - I appreciate your help. Still think that £355 is a bit steep but at least I know what it means now!

Its not that steep. Many valuers have to drive to and from the property and that can often take longer than the time spent valuing the property. £355 would include VAT so you are only allowing 3 years work in that fee.

homer_j_3

it depends on the value of the property too.

Dan is right in saying there will be profit in that figure but that is life, businesses are there to make profit. As long as the overall pricing of the deal meant that you paid the least amount over the period of time, you have done well.

MBM

Margaret, the others seem to have missed that you live in Scotland. Therefore the lender should have to accept your valuation. Check with your broker.

Margaret_Skinner

MBM wrote: »

Margaret, the others seem to have missed that you live in Scotland. Therefore the lender should have to accept your valuation. Check with your broker.

Sorry - I should have put that in - didn't realise that would make a difference.

I've heard back from my broker now & she says I don't have to pay it at all! I would have had to pay this if I had asked the lender to arrange the valuation but because I did this myself and have paid it, I can ignore the fee. Good news! Although still worrying because it shouldn't have been in there at all in that case & I might have ended up paying it not realising I didn't have to.

Thanks for all your help.

jem16

MBM wrote: »

Margaret, the others seem to have missed that you live in Scotland. Therefore the lender should have to accept your valuation. Check with your broker.

Interested in that statement as it's the first I've heard of it.

My son has applied for a First Direct mortgage and they have accepted his valuation. We didn't realise FD had to accept it as he's in Scotland.

Why is that?

MBM

The rules in Scotland are different to England. The lender has to accept your sons own valuation.