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Reservation Fee
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Reservation fee is a 'front end' charge levied by some home lenders. The idea is you're asked to pay the fee (typically in the hundreds of pounds) to secure the funds you're intending to borrow. It's sometimes described as an Adminstration Fee or a booking fee.
Reservation fees are often levied on fixed rate mortgage offers where the funds on offer may be limited.
Some lenders believe the fee is a useful way of getting the borrower to show commitment at an early stage. Some, but not all reservation fees are refundable should the home loan not go ahead.
See Also: Mortgage Centre and Mortgage comparison Service for the latest facts and figures.
Last Updated: July 2007 © Moneyextra.com
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