Associated Costs
Unfortunately, as with everything, there are additional costs when entering
into any financial agreement. In the case of a mortgage, there are a number
of costs you need to be aware of.
Valuation Fee
The lenders will require an independent survey of the property they are being asked to lend money against. As you are asking the lender to mortgage the property, they expect you to pay the survey fee with your application. Unfortunately there is no 'set' fee for a survey, it varies from lender to lender. The valuation fees are normally set within bands i.e. £25,000.00 to £50,000.00 would be the first band and so on.
The higher the value of the property the more you are going to have to pay. For houses in the first band you should be thinking a cost of between £125 and £200 depending on which lender you choose. At the other end of the scale for properties in £250,000 to £500,000.00 range you could be asked to pay £500. to £1000.
Our mortgage sourcing software will tell you what the survey fee will be against each of our products. Please also bear in mind the survey the lenders require is for their purposes only, it is not a full survey of the property and therefore does not guarantee the property is free from any defects. It is in your own interest to request a 'Home Buyers Report' or a full structural survey to be absolutely sure the property is sound. The costs of either a 'Home Buyers' or Full Structural survey are substantially higher, we can give you an indication of the additional costs on request, against a specific property.
Always remember older properties are more likely to have problems than new ones, for this reason we would certainly recommend you pay the extra for a Home Buyers report, at the very least on properties of this type.
Legal Fees
In recent years the fees have come down but you should be thinking a minimum of £350.00 for a remortgage and more if stamp duty is applicable. You will be pleased to learn we have been able to negotiate favorable rates for our clients and the precise cost for your mortgage will be shown on our illustration we send out to you. You are not obligated to use our solicitors, we are offering the service to our clients as part of our customer care policy.
We would like to point out our arrangement with our solicitors allows our clients access to an Internet based tracking system our solicitors have available which allows you to see how your case is proceeding through their system at any time of the day or night.
Broker Fees
Broker fee of between 1% and 3% may be payable on completion.
Lender Fees
You have to watch out for this one because they fall into two categories. Bookings fees are required at the time of application and are not refundable if the loan does not proceed. Arrangement fees are payable on completion and are normally added to the loan. Under normal circumstances Booking fees are charged when the lender is offering a special deal and the fee is to cover the work they will have to do before going out to a mortgage offer. Arrangement fees will not be charged if the application is canceled or fails. We suggest you always take advantage of our 'agreement in principle' service. What this basically means is we pass your details to the lender, he then runs some checks on you and will then come back to us and say 'the loan is agreed in principle subject to the following terms' You then know exactly where you stand. Normally the 'subject to's are income confirmation and survey report. Always remember, it is an offense to give false information on an application form. Always, always tell the truth, you can go to prison for obtaining a mortgage under false pretenses.
Insurances
Fall into different categories and can be very confusing. Lets start with
an ASU, it stands for Accident Sickness and Unemployment. This is a very
useful insurance cover to have because it pays the mortgage for you if
you become unemployed or are unable to pay due to sickness or through
accident. Unfortunately recent legislation brought in brought in by the
government means that we are all responsible for paying our mortgage payments
for the first nine months after advising the DWP of your circumstance's
the DWP will pay the interest only, directly to your lender, only after
nine months have passed. If you have failed to make provision for this
cover or your savings wont stretch to pay the nine installment's on your
mortgage you could loose your home. We all suffer from the same thought,
'I'll think about the insurance cover later' but we always end up leaving
it too late. Other types of instances you need to consider are Life Assurance
and Household. In some cases the lenders will not only require these types
of policies they will want you to use their particular company.
Your home may be repossessed if you do not keep up repayments
on your mortgage.
A fee may be charged for advising on or arranging mortgages of between
1 and 3% of the sum borrowed. The exact amount will depend upon your circumstances
but we estimate it will be 1% of the loan amont.
