Additional Costs

Equity Release - Additonal Costs

PROPERTY ADVICE BLOG - Additional Costs Of An Equity Release Scheme

Administration Fees for Completions, Arrangements and Applications.

Some lenders and reversion companies ask for between £300 and £600 to cover paper work costs. Property Advice Blog would suggest borrowers discuss these costs in the initial stages of research.

Valuation Fee - The mortgage lender will charge you for valuing your property in order to see whether it offers good security for a loan. A reversion scheme company will also charge you for valuing your property so they can agree on a price for buying a percentage of your home. If your home is worth over £100,000 the valuation fee is typically between £200 and £300. A lower charge will be issued for properties which are worth less. In some cases the company may refund the valuation fee when the loan has been paid. Discuss the rules surrounding refunds when you meet with your lender in the early stages.

The Solicitor’s Fee - When you take out a mortgage there is usually a necessary level of legal paperwork for your solicitor to deal with. This can typically cost anything from between £300 and £600. If you are using the mortgage lender’s solicitor, ask for a breakdown of costs in advance. If you are using your own solicitor you will have to pay their fee as well as the lender’s legal fees.

Insurance Costs - To make sure you are fully covered, Property Advice Blog recommends taking out building insurance to cover the period when the plan is in place. Building insurance usually costs between £200 and £300 per year.

Early repayment charge - If you decide to pay back your lifetime mortgage earlier than initially agreed, some lenders will charge you for the privilege. Discuss with your lender about ‘early-repayment charges’ to discover their policy on early completion of the loan.

Fees for Mortgage Intermediaries - The person who arranges your equity release scheme is known as a mortgage intermediary. This individual may require a fee for giving property advice, assisting with lending, and arranging lifetime mortgages. The FSA recommends that all mortgage intermediaries are authorised by them. If however you choose an independent intermediary you should fully understand their fee before signing up. Usual fees can vary from between 0.5% and 1.5% of the amount you wish to borrow.