Mortgage Costs - Stamp Duty, Fees and Surveys

Whether buying a home or remortgaging, it is important you are aware of all the likely costs. Below is a list of likely charges you will need to consider. Some of the costs will depend on the price of the property you're buying.

Mortgage arrangement/application fee

When taking out a mortgage there may be an arrangement fee charged by the lender althugh there are often "fee free" options, especially when remortgaging. Some lenders may charge a completion fee, although these are less common. We will always make sure you are fully aware of any applicable fees.

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Valuation/survey fees

You will be required to get at least a basic valuation carried out and it may be prudent to have additional surveys carried out. A valuation will assess the value the property, whilst a survey will provide full details as to the structure of the property and any faults that it may have.

Valuations and surveys are there to provide peace of mind that you are paying the right price for the property, as well as giving the lender confidence as they want to see the property is suitable security for the mortgage required. The borrower usually pays the costs upfront when the application for the mortgage is made. Asking the surveyor to carry out your personal survey at the same time as the lender valuation can save money, and guarantee you peace of mind about the value of the property.

There are 3 levels of valuation/survey:

1. Basic valuation - carried out on on the lenders half with the borrower generally paying for it. Generally the cost of the valuation depends on the value of your property. The report is basic and all lenders disclaim any responsibility for the condition of the property. You have no comeback against the surveyor for any defects or problems overlooked in the report.
2. Homebuyers survey/report - this service includes a basic valuation but also contains a report on the condition of the property, highlighting any defects that the surveyor has spotted. It is still fairly basic.
3. Full structural survey - the most in depth report and if the property is defective the surveyor should discover this. If major defects are not discovered then the surveyor acting for you would have some legal liability, and you would be able to claim redress.

If when level of survey finds potential or actual defects then the surveyor may suggest you obtain additional specialist reports. These will be at your expense although it may be possible to obtain certain reports, such as a damp and timber report, at no cost. Dealing with solicitors can be the cause of delays in the process, however our expert advisers will advise you on a reliable and competitively priced solicitor. Speak to an adviser today for details.

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Early repayment charge

The charge that lenders make if a mortgage is paid off during any "tie in" period.

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Estate agents' fees

Some agents will charge upfront fees and some may charge fees on completion. Generall, the cost is based on a percentage of the property value, so it is best to get a quote first.

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Broker fee

Most brokers charge fees for their advice and recommendation service offered to you. Where we charge a fee, this would be paid when you receive a formal offer of mortgage from a lender - we do not charge any upfront fee. It is important you check what any individual brokers fees are and when they are due. Your adviser will be able to explain any broker fees to you, although our fee policy is clearly detailed on every page of this website.

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Solicitor/conveyancing fees (including Land Registry fees)

Conveyancing is the legal process to transfer the ownership of a property from the seller to the buyer.

When purchasing a property, your solicitor generally works on behalf of the mortgage lender, who will require certain searches before they will release the money to the solicitor for your property.

The solicitor will draw up a contract of sale where you are selling a property, as well as apply for title deeds (or details of freeholder if leasehold) from your mortgage lender. They will also take responsibility for setting a completion date and informing the relevant parties, as well as making sure all mortgage conditions requiring attention are complied with.

We have plenty of experience dealing with solcitors and can help you find a reliable and competitively priced solicitor within minutes, contact them today for details.

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Reservation fees

This is a 'front end' charged by some lenders.Yyou're asked to pay the fee (typically between £100 and £300) to secure the funds you wish to obtain. It can be described as an administration fee or a booking fee. Some lenders feel that this is a good way of getting you commited at an early stage. Some, but not all reservation fees are refundable should the home loan not go ahead.

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Stamp duty

When you buy property, you may need to pay stamp duty. Stamp duty land tax (SDLT) applies to any property purchase over £125,000, unless your property is in a disadvantaged area where separate rules apply. The list below shows you the current limits (as at March 2010):

Purchase price of property - Stamp duty %age
Up to £125,000 - 0% 
Up to £250,000 (for first time buyers only) - 0%
£125,001-£250,000 - 1%
£250,001 - £500,000 - 3%
£500,001 - £1,000,000 - 4%
Over £1,000,000 - 5% 

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Removals

Removal fees will be incurred if you book a company to move your belongings from one property to another. You should look around for a competitive quote and ask around for a reliable removal firm, your estate agency can help you with this.

We can help to make sense of the mortgage maze.

We understand that this page may make the mortgage process seem very daunting. We're here to help make things easier. Get in touch with us today to arrange a consultation and let us help.