Donnette

Mortgages are a complex borrowing and along with the monthly payments which we all expect to pay, there are some other costs which are not so obvious to take into account. As this type of borrowing is not one we do that often, it is often easy to miss or not understand some of the additional costs that may be incurred. Reading the terms and conditions is a good place to start, as most of the time it is here you will find in the small print any other charges.

When you take out a mortgage, one thing many of us fail to consider is what would be the consequences of ending that particular mortgage deal. With remortgaging becoming more popular and banks and building societies constantly reminding us of that better we could be getting if we were to switch a huge number of us are doing exactly that, remortgaging to get that better deal.

If you think you might consider remortgaging in the future then look into any exit costs that may be applicable. Though at the time you take out the mortgage deal the interest rates may seem very attractive and competitive, what could be a downside is how much money you will be required to pay the lender if you decide remortgage.

Some lenders may charge a fee for you to have the privilege of taking out a mortgage with them known as an arrangement fee. This can be anything from a few hundred pounds to a percentage of the amount you want to borrow. So this could add up to a huge amount so it is may be worth looking at other lender options.

An attractive interest rate with a particular lender may be one of the reasons you decide to borrow from them in the first place. Be sure to find out exactly how long this special rate is applicable for and what happens after that special rate period. To give you an example a two year deal with an exceptional interest rate might seem like a great option, but after that period the interest rate moves onto the standard variable rate which means your monthly payments go up considerably and you are tied into it unless you want to pay the penalty fee of exiting early. So what seemed liked a good option may turn out to be a costly one if not careful.

Please visit Mortgages UK for more information.