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Arrangement fee or Administration fee - Some lenders charge an arrangement fee and depending on the lender this may be paid in advance and is generally not refundable if the loan application does not proceed. One reason for this is to stop multiple applications being made to several lenders at the same time or where an arrangement fee is paid to secure a fixed rate and an alternative lender introduces a lower fixed rate the following week. The arrangement fee is therefore partially regarded as a commitment to proceed with the loan and some lenders actually refund the arrangement fee on completion of the loan. If you are arranging your loan through a mortgage broker, there may also be an arrangement fee payable to the broker. This fee varies with each broker depending on their specific fee structure. Some brokers do not charge any fees as they rely on procuration fees that may be payable from the lender and commission from any insurance products taken out with the loan i.e. commission generated from life assurance, ASU and buildings and contents plans. Generally your fee to the mortgage broker is to offer independent mortgage advice i.e the broker should find the best mortgage with any lender depending on your particular circumstances that suits your circumstances and guidance throughout the mortgage process.
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