Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

Mortgage Plan : Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan

Initial Interest Rate: 6.24% for two years

Rate for remaining term (Variable): 7.89%

Overall cost of comparison (APR): 7.9%

Early repayment charges Apply?: Yes *

Product Fee: £999

Keep your payments lower for the first two years of your mortgage with a rate of Bank of England Base Rate +0.49%. Then Bank of England Base Rate +2.14% for the remainder of the term (variable) 10% Overpay facility. Loans available between £25,000 and £250,000. *Early Repayment Charge: You are only tied into your mortgage during the first two years. Repay all or part of your mortgage in years one to two and pay a fee of 5% of the amount repaid.

Link to previous articles: Alliance Leicester 2 Year Base Rate Tracker Mortgage Plan Alliance Leicester 2 Year Fixed Mortgage Plan Alliance Leicester 2 Year Fixed Buy To Let Fixed mortgage Alliance Leicester 5 Year Discount Max LTV 90% Mortgage Plan Alliance Leicester 2 Year Base Rate Tracker FeeSaver Alliance Leicester 2 Year Base Rate Tracker Max LTV 90%

Mortgage Charges and fees - What to lookout for

Here is a list of common Mortgage Charges and fees that one should take note of:

Arrangement Fees

Most lenders nowadays charge you for the work involved in setting up a mortgage or to reserve a loan at a particular rate. The amounts can vary considerably between lenders. Paying more doesnt always get you a better deal.

High Lending Charge

If you are borrowing more than 90 per cent of the property value, check to see whether you will be charged an extra fee. This is to protect the lender in case you fail to keep up the payments, but not all of them make this charge.

Insurance

Some lenders will offer you a lower mortgage rate if you buy their home insurance products. They will also encourage you to take out their mortgage payment protection policy. It is usually better to shop around for the cheapest insurance deal.

Early Redemption Penalties

With mortgage special offers, fixed rate deals, etc, you will normally be charged a penalty if you pay off your loan within the offer period. In particular, try to avoid those loans with redemption penalties that extend beyond the end of the offer period as you will be stuck on the lenders standard variable rate.

Initial Disclosure Documents And Key Facts Illustration

Initial disclosure documents (IDDs) spell out mortgage advisers services, such as whether they can recommend products from one company only, or are free to sell mortgages from all lenders. Key facts illustrations (KFIs) are given to borrowers when they apply for or are recommended a mortgage. These outline the mortgages cost over its term, repayments, fees and an interest rate expressed as an annual percentage rate (APR).

Annual Percentage Rate

The APR tells prospective customers the interest rate over the life of the mortgage. This factors in any initial offer rate and then the lenders standard variable rate to which the mortgage reverts, as well as the impact of fees. The APR in the key facts document does not reflect that many mortgage borrowers switch to better deals than the lenders standard variable rate (SVR) after their initial offer expires. Neither does it include the potential costs on leaving the mortgage, such as administration fees and early repayment charges.

Standard Variable Rate

Because house prices are at a record high many people (probably including yourself) are now thinking of their mortgages in the long term as well as the upfront rate. For this reason it is worth knowing what current customers are paying. It is highly unlikely that when you come to the end of your fixed or discount rate period you will be on the same SVR as current customers. But you can use the information to see how the lender compares against others in the market.

Link to Previous article : Types of Mortgages

Remortgage Cost

Continuing further from the previous article on Remortgage: Changing your mortgage plan, let's today talk about how much it will cost you for remortgaging.

What will remortgage cost you?
Even if there are no early repayment charges, your current lender might make an administration charge (sometimes known as an exit administration fee).
If you're switching to a new lender, they will insist on the same legal work your old lender did, to make sure the property offers proper security for them.

Lenders may also want an up-to-date valuation on your property.
With some deals the lender may pay some of these as an incentive to get your custom. But bear in mind you may have to pay back their value if you pay off your mortgage early.
Remember, when you've found a good deal, it's worth going back to your current lender to see if they will offer you a similar deal to keep you as a customer. This will save you some bother in moving on and maybe some money too.

Top tips
- Check your annual mortgage statement to see what you've paid and what's outstanding.
- Review your mortgage whenever a special deal ends.
- Don't assume that your current lender will keep you up to date with their best deals.

General Mortgage Fees and Mortgage Costs

In the previous article, we talked about the Mortgage Fees and Mortgage Costs . They were the details that are usually mentioned in the keyfacts document. However, there are still a lot more things that need to be know, which are usually not listed in the keyfacts document.

These won't be listed in the keyfacts documents.
Fee or charge	What's it for?	How much?
Estate agency fee	Marketing and selling your home.	Typically 1-3% of the selling price; ask for a quote and shop around.
Stamp duty land tax (known simply as stamp duty)	Tax payable to the government when you buy a home. Make sure this is in your budget if it applies to you - the cost can be high. It is the buyer who pays stamp duty, not the seller.	Varies depending on purchase price of property see HMRC website.
Legal fees	Paid to your solicitor to represent you, negotiate for you, and carry out the necessary searches, land registry and so on. This is also known as conveyancing.	This usually will vary according to the firm. Budget for at least £400 and possibly more. Ask for quotes.
Survey fee	Your lender will carry out a valuation visit (see above), but this is only a very basic inspection. You may want a Homebuyers report or a structural survey if you want a detailed report on the condition of the property.	This will vary according to the surveyor, the size of property and the type of report you need. Ask for quotes.
Removal costs	Moving all your belongings from your old home to your new one.	Costs will vary, although you can save money by packing up everything yourself. Ask for quotes.

It becomes very important that you know the above mentioned fees and costs for your mortgage. Otherwise, once you finalize the mortgage deal and later you will discover that you are required to pay all these charges, it may hurt you in big way financially.

Here are some Top tips
1. Look at your keyfacts about this mortgage document for fees you must pay.
2. Use our checklist so you are aware of the costs involved.
3. Shop around for quotes – you can often save money.

Mortgage Fees and Mortgage Costs

In this article, we will discuss about the various fees levied when you opt to take a mortgage. Some of the fee is charged by various people involved in the process, while some goes to the government in the form of stamp duty, etc.

While all the mortgage or loan related fee and costs will be set out clearly in the keyfacts document about the mortgage document that the lender or mortgage broker gives you, there'll be other costs you'll need to pay for. These include stamp duty, real estate agency fees and the lawyers' fees.

Often you can add certain fees charged by the broker or lender to the mortgage and pay them back over time with your monthly payments. But if you do this, remember that they will cost a lot more in the long run because of the interest that you will have to pay for taking the option to pay in the long run. If you want to do this, ask your lender or broker to give you a keyfacts document about this mortgage on this basis and one without the fees added, so you can compare what you'll pay.

All mortgage-related fees will be set out in the keyfacts documents. They may include any of the following:
Fee or Charge	What is it charged for?	How much can it be
"Mortgage advisor or broker fee (if you use one)	For arranging the mortgage or giving you advice.	This depends on the broker, but if they charge (some don't) they must tell you in the keyfacts about our mortgage services document.
Mortgage or Loan booking fee or arrangement fee	A fee charged by the mortgage lender, usually to reserve your mortgage funds or to cover the distribution/administration costs of processing your mortgage loan. For some lenders, the fee may also be linked to special deals with a lower initial interest-rate.	This varies, but £200-£700 may be a typical amount. Where the fee is linked to a special deal it may be even higher, £2,000-£3,000 or more. These large fees can significantly increase the overall cost, particularly if you add the fee to the loan – and so pay interest on it. Use the total cost information in section 5 of the keyfacts about this mortgage document to find out the overall cost.
Valuation fee	This is the fee a mortgage lender may charge for a valuation of the property to assess whether it is appropriate security for the mortgage.	This varies from lender to lender, and on the value of the property.
Higher lending charge	If you're borrowing a high percentage of the value of the property, the lender may charge a fee to take out insurance cover. This protects them in case you can't pay back your loan and they have to sell your house at a loss.	This will depend on how much you borrow, and how much you're contributing as a deposit.
Fee for making your own buildings insurance arrangements	A fee charged by a lender for the administration costs of checking there is sufficient buildings insurance cover if you do not insure your property through the lender.	Typically £25 but may be payable yearly or each time you change insurer.
Telegraphic transfer fee	A possible charge from your lender if you need them to transfer the mortgage funds to your solicitor on the same day.	Typically £40-£50.
Re-inspection fee	Sometimes a lender will need to re-inspect the property after the original valuation, usually to check if you've made agreed repairs.	Typically £50-£100.
Early repayment charge	If you repay all or part of your mortgage earlier than the agreed term.	This may not always apply, but section 10 of the keyfacts about this mortgage document will give an explanation of when it applies and cash examples. Check the terms and conditions of the mortgage for full details.
Early repayment charge	If you repay all or part of your mortgage earlier than the agreed term.	This may not always apply, but section 10 of the keyfacts about this mortgage document will give an explanation of when it applies and cash examples. Check the terms and conditions of the mortgage for full details.
Fees to repay the mortgage (known as exit administration fees)	A fee to your lender when you repay your mortgage, even if you are not repaying it early.	Typically £75-£300 (plus any early repayment charge, if applicable).