Do you lose your mortgage booking fee if the purchase fails?

fantasyvn

As you all know, these days, to qualify for a competitive rate, you often end up paying a steep booking fee before your mortgage application is approved by the bank.

I was wondering whether this booking fee will be refunded or not in the event of the purchase being unsuccessful. Or at least, can you keep this mortgage deal while looking for another house, without having to pay for the booking fee again?

LillyJ

I was also wondering this and wondering whether adding the fees to the loan and then paying it off in the first month would make any difference to this - ie they wouldn't have your money physically with them until the purchase went through.

Cazza

If you pay the fee upfront, then pull out of the transaction completely, you won't get your money back. If it falls apart, but you find another property and go back to the lender with new property details then you won't have to pay another fee. Don't cancel your application after it's all fallen through, just get house hunting again and contact your lender once you've got an offer accepted on the new property.

As per Lilly J's comment, I do suggest to some customers that they add this fee to the mortgage, then make an overpayment equivalent to the set up fee in the first month, please check that your mortgage product allows you to do this first though!! It's true, if they don't have your money in the first place, they can't keep it!

Reds-on-Sea

I was advised (when I was thinking about getting a mortgage with a fee) to do just that, add the fee to the mortgage (most give this option, though I didn't want to as in the long run you end up paying back twice as much)

I got round this, as I'd budgeted the cash for a fee, I would've added the cash to my deposit, thus safeguarding what was going to be a £1000 fee from being lost if it all fell through. As it goes, I got a fee free mortgage anyways, but I didn't like the sound of a non-returnable arrangement fee.

LillyJ

I have added it to the loan with the view to paying it back in the first month, it just means we have the money for longer and if it gives the additional benefit of not having to pay the fee if it all goes wrong then that can only be good.
We can over pay by 10% per year so it won't be a problem as our fees are only £500.

UK007BullDog

Some product fees are not refundable. If the lender declines you then you should get the fee returned. Also there is a time limit on the fees with finding a new product, 3 to 6 months is usual.