A mortgage isn’t just a loan between you and the lender. It’s someone believing in your dream of owning a home. As much as we’d like to be “by the numbers” around here, we have to admit that we have a soft spot for mortgages. They allow us to achieve our dreams. However, if we want to keep our dream home, we need to walk into every mortgage with our eyes open. We can’t just assume that everything will line up smoothly. We have to know what we’re getting into.

When you apply for a mortgage, you’re walking into a den of fees. Mortgage lenders will apply a single charge when you start up with them. They claim that there are administrative costs that come into play when they’re trying to lend to you. However, it’s all about putting money in their pockets. This is also referred to as a reservation fee, an administrative fee, or even a booking fee!

You might feel sorry for them and say to yourself, “Well, it’s probably just a small fee, right?”

Depends on how you define small. It’s been shown that the average fee involved to get the mortgage in the first place — after you’ve jumped through hoops of getting approved — is around eight hundred pounds! Does that sound small to you? Believe it or not, these lenders feel that the fee is too small and they want MORE than that! Lenders even have the gall to ask for a piece of the amount you’re trying to get from them, in the form of a percentage. This can be nearly two percent of the entire loan. For a one hundred and twenty thousand pound loan, you’re looking at nearly 2400 hundred pounds!

Some of them might say to you that you can roll those fees into the “body” of the loan where you just make monthly payments like normal. This can actually add a lot of interest to your loan and cause you to pay more to them, not less. As always, this is something that you need to do the maths on to see which direction would be best. Don’t allow these mortgage lenders to bully you around when you have all of the power in the world to stand up for yourself. Good luck!