Fees & Costs

Not only is taking out a mortgage a big financial commitment, there are also other fees and charges that you may be required to pay as part of the process of putting your mortgage in place.

Plan in Advance

You will find information about some of the likely costs you can expect to incur. These costs come under a variety of headings and the exact amount you will pay will, of course, depend upon your circumstances and the type of property you’re mortgaging. It’s a good idea to discuss this with your adviser. I will be able to help you draw up a budget to cover all the likely costs you can expect to incur.

Stamp Duty

The higher the purchase price of a property, the more stamp duty you will pay. Furthermore, if the property you are buying is a buy-to- let or second home the stamp duty increases further. Currently First Time Buyers can claim some relief.

Different rates and rules apply in England, Scotland and Wales.

Survey Fees

Depending on the type you choose, you could be paying anything from £250 for a basic report to around £1,000+ for a more detailed structural survey. Your surveyor will discuss your requirements with you.

Other Costs You May Incur

If you’re selling a property and you use an estate agent, you will typically be charged a fee usually equating to 1% – 3% of the sale price, plus VAT.

You may need to use a removal firm. They will provide an estimate of the cost based on the amount of furniture and possessions that will need to be transported and the distance you’ll be moving.

Your Lender

Here are some examples of fees and costs that could be charged by your lender.

Deposit – This is normally a minimum of 5%. The actual amount is based on the purchase price of your property.

Valuation fee for lenders purposes – This could be anywhere between nil and £1000 depending on the value of your purchase.

Arrangement/ Product fee – If this is charged by the lender it is normally payable on application and is refundable if the mortgage doesn’t go ahead. Typically £999 but can be nil or a higher amount sometimes expressed as a percentage of the loan amount.

Booking Fee – If this is charged by the lender it is normally payable on application and is non refundable. It’s a way for lenders to cover expenses for cases that cancel during the application process.

Mortgage account fee/ Redemption administration fee – This administration fee is charged by some lenders for the running of your mortgage account and is usually deferred until full redemption of the mortgage.

Early repayment charge – As the name suggests, this is a charge made to cover a lender’s costs if you repay all or part of your mortgage before the end of your mortgage deal.

Legal Costs

Your solicitor or conveyancer will charge you for carrying out all the legal work involved in your purchase. You will also have to pay for any searches that are required. These include local searches, water/drainage search, environmental and flood searches. There are also land registry fees, bank transfer fees and disbursements costs.

The solicitor will provide an up front estimate of what their fees are likely to be and they will itemise the separate components for you. Total costs are likely to start around £1500 and will depend on the value and tenure of your property and the area in which you are buying.