Cost and Fees
- Valuation Fee
- Arrangement Fee
- Legal Costs and Fees
- Stamp Duty
- Higher lending charge
- Repayment charge
- Buildings and contents insurances
- Mortgage payment protection
- Adviser’s fee
This may include a non-refundable administration fee and must normally be enclosed with the application. The whole fee is non-refundable once the valuation has been carried out. The type of valuation you choose will depend on factors such as the age and condition of the property and whether there is any history of subsidence in the area.
- Basic mortgage valuation. This is for the lender’s own purposes confirming the property provides security for the loan. You may wish to consider one of the more detailed types of survey.
- Homebuyer’s report. This provides concise information in a standardised format on the state of repair and condition of the property. The report will include comments on the property’s defects and the valuer’s opinion as to its marketability.
- Full structural survey. This is a structural report based on a detailed examination of the property. Any areas of concern that you might have about the property will be investigated.
This may be payable either in advance, where the lender will ask you to enclose a cheque with the mortgage application, or on completion.
All or part of it may be non-refundable if the mortgage is declined or withdrawn. This will be specified in your mortgage Key Facts illustration.
The fees charged by a solicitor include the charge for conveyancing (the transfer of ownership of land), the costs of legal registrations and miscellaneous costs (known as disbursements); for example, Local Search fees and Land Registry fees. We recommend you obtain an estimate of these costs early on in the process.
Stamp duty is a ‘purchase tax’ and is generally payable where the purchase price of the property is more than £120,000. The current charge is 1% of the purchase price of the property. This increases to 3% if the price is more than £250,000 and to 4% if the price exceeds £500,000. (Stamp duty is not payable for remortgages).
This may apply if the amount you wish to borrow is more than, typically, 75% of the value of the property. The lender will require additional security on the amount in excess of this threshold in the form of an insurance policy (a higher lending charge).
This policy is used to protect the lender only and is used to cover the lender in situation where the property is repossessed and the loan plus any unpaid interest exceeds the sale value of the property. You will then owe the insurance company any payment claimed by the lender. The lender will arrange the insurance and the premium will be paid by you, in some cases it can be added to the loan.
Some lenders make an early repayment charge based on the product selected. Others may charge at any time if you pay off your loan before the end of the normal mortgage term. In some cases this can be a significant amount. Always check the terms in the offer letter from your lender.
Buildings and contents insurances
All lenders require that you fully insure the property for the total cost of rebuilding it. It is also strongly recommended that you take out contents insurance. Your adviser can arrange this cover for you.
We recommend you consider protecting your mortgage and associated payments in the event of being unable to work through accident, sickness or unemployment. Your adviser can arrange this cover for you.
Your adviser will explain how he/she will be paid for arranging your mortgage. The exact details will be shown on your key facts illustration. A fee may also be received by your adviser for arranging buildings and contents and accident, sickness or unemployment cover.