The following is a brief explanation of the possible costs of taking out a mortgage. We will fully explain which of these are payable in your situation and whether the lenders offer any assistance towards the costs, as well as when and how they are payable.
Many other brokers charge a fee payable by the borrower for advising on and arranging your mortgage. However MortgageFinders believe you should get free advice and will NOT charge you a fee, therefore helping you keep your overall costs as low as possible.
This is insurance on the property, which will normally be a condition of the mortgage loan. You may also want to insure your contents; again MortgageFinders will be able to provide you with more details of buildings and contents insurance products.
Higher lending charge
An insurance taken out by the lender, but paid for by the borrower for high percentage advances, possibly over 75% loan to value (LTV). This covers the lender if, as a last resort they have to repossess your home and sustain a loss on the sale price achieved compared to the outstanding mortgage liability. Many lenders now only charge for this if you borrow more than 90% LTV.
Your mortgage loan is secured by a legal charge over your property and therefore you will need to appoint a solicitor or conveyancer to carry out this work. This transaction is known as conveyancing. Usually the same firm will act for you and your lender, which will help minimise the cost. MortgageFinders can help you select a solicitor and save costs however.
Often included with the valuation fee charge, the lender may charge an additional fee for administering your application. It may be refunded if the application does not proceed beyond the initial acceptance stage.
A lender may charge a one-off fee for some products, for example with fixed rate mortgages.
Valuation and survey fees
Before granting a mortgage a lender will carry out an inspection of your property to check it is in good condition and represents reasonable security on which to lend the money. Your lender will use a qualified surveyor to provide a current valuation. The fee charged is usually based on the value of the property.
You should also give careful consideration to obtaining your own detailed report, called a Homebuyers report from the lender’s surveyor. For older properties, or those with potentially serious defects a full structural survey is essential.
Stamp Duty Land Tax
This is a tax payable to the Government upon the purchase of property. If the purchase price is £125,000 or less you don't pay any Stamp Duty Land Tax at all. Between £125,000 & £250,000, you pay two per cent of any balance above £125,000. Between £250,000 & £925,000 you also pay five per cent of the balance above £250,000.
For example, a house costing £175,000 means you will pay £1,000 stamp duty, whilst on a house costing £350,000 the stamp duty totals £7,500.
Please contact us for help with stamp duty on houses above £925,000.
You can also come to us for property conveyancing
services throughout Exeter, Dorchester, Truro, Torquay, Taunton and Plymouth.