The Mortgage Costs

Other charges to expect
Plan your Mortgage carefully

Setting up a Mortgage contract can be very expensive, so it pays dividend to check and compare throughly the different products from the whole of the market, and this is what we do best. You should also be aware of other associated costs that may be applicable to your property purchase or remortgage transaction. A good idea is to draw a detailed plan or breakdown of all likely costs to be sure you budget accurately.

The property survey
Check it's condition before buying

You will have to pay for the property to be surveyed, and often can choose between the basic Lender valuation, and the more expensive Homebuyer survey (which is usually recommended for all purchases) or the lesser required full structural survey. You should also be aware of additional costs that you may have to consider should the Surveyor recommend that he requires additional information in order to provide a valuation to the Lender. This could be for example a Structural Engineers report or Timber and Damp report. Basic Lender Valuation: Mortgage Lenders will instruct an inspection carried out on your new property by an independent surveyor, who will report back his opinion of the value of the property and basic information regarding its current condition and remarketability. Usually, the fee for this report is passed on to the borrower and the cost varies from lender to lender and is based on property value. When your advisor provides you with the Key Facts Illustration detailing his advice, this cost will be quoted. It is essential to understand that this report is prepared for the lenders purposes only and it is cannot be relied on by you. Homebuyer Survey / Full Structural report: Unless you are buying a newly or recently built property that is covered by the NHBC scheme (National Home Builders Certificate) it is prudent to obtain your own detailed report on the condition and value of the property. The cost of either of these reports is in addition to the fee the Mortgage company charges for its Mortgage valuation. However, it is usually possible to save money on the combined amount of these fees by instructing the same firm as the mortgage company uses to carry out an inspection for you at the same time as for the lender. You may decide to wait for the Mortgage valuation to be completed before instructing your own inspection. Whilst this is likely to be more expensive for you, the advantages are that if any major problems arise they should be noted in the lower priced report; you may then decide not to proceed or have your professional focus specifically on the areas of concern. Again, these prices vary. Your mortgage advisor will be able to quote these fees for you and they will again be detailed in your Key Facts Illustration

Instructing a Solicitor
Or Licensed Conveyancer

You will need to use a licenced Conveyancer or Solicitor to complete the purchase or remortgage you intend, and in most cases you will need to pay for these services. Be aware that you will be charged for any additional work carried out. We are happy to recommend a reputable local firm if preffered.

Stamp Duty costs
A land tax

This varies dependent on the purchase price of the property, but is 1% for purchases over £125,000 (or £150,000 in disadvantaged areas), 3% for purchases over £250,000 and 4% for purchases over £500,000. Please note that the Stamp Duty threshold has been temporarily increased to £175,000 until September 2009 by the Government in a bid to encourage more First Time Buyers onto the housing ladder. Stamp Duty may also be required on Transfers.

The Arrangement fee
Make sure you're aware of the charges

Most Lenders charge an arrangement fee, usually addded to the Mortgage Loan advance. This is their charge for the processing and setting up of the Mortgage contract. It differs enormously, and these fee's must be legally stated on the product Key Features Illustration, and must be clearly explained by the Adviser. Make sure you are fully aware of these charges before applying to your Lender. Remember also that by adding to the loan it will attract additional interest charges!

Redemption charges

Some Mortgage products have a period of redemption. This usually means that should you redeem your Mortgage in part or full before this end of this period you will be liable to a penalty charge, which can be very expensive. The charges must again be clearly stated on the product Key Features Illustration, so make sure that your Adviser has fully detailed and explained these. Some redemption periods extend even beyond when your initial rate has expired, so be careful that you are not committing yourself to a period on the dreaded Standard Variable Rate as this will usually be very uncompetitive and therefore potentially expensive. If you are re-mortgaging then you need to ensure that you are not going to suffer a redemption charge by repaying your existing Mortgage.

Broker fees
How much is too much?

It is not unusual for Brokers or IFA's to charge in some cases considerable fees to advise on or arrange your Mortgage. It is worth shopping around to find a Company that offers 'whole of market' advice and recommendation for a reasonable fee for the work they carrry out for you. At James Raynor we believe our fees to be amongst the very lowest, but are confident that you will find our customer service is amongst the very best.

Estate Agency fees
Ask for an amount in sterling!

If you are selling a property in order to finance a new purchase, then ask your Agent to clearly state the exact fee plus VAT for selling your property. We have known occasions in the past where a client was flabbergasted at the actual charge made by the Agent. Many agents ask a percentage of the agreed selling price,and it could run into tens of thousands.

Removal costs
Especially if you have young Children!

If you have a large amount of personal belongings to move to a new property, then it pays to get quotes from reputable Removal firms. It can be expensive but will mean that at this stressful time you can be organised instead of exhausted! Although going the DIY option would save money, if you have Children then it may not be practical for you.

Higher Lending Charge
Can be a big expense

Some Mortgage lenders will require additional security for a loan if you are borrowing a very high percentage of the property value. The Higher Lending Charge usually purchases an insurance indemnity policy that reimburses any losses should the Lender need to take possession of your property following non-payment of your mortgage. If the sale of the property does raise enough money to clear the debt outstanding the insurer provider will also cover the difference, up to the value of the policy. The insurer, in turn, has the right to pursue the borrower to reclaim any amount paid out against the policy. This charge, when made, is usually added to the loan and it can increase your Mortgage debt and significantly increase the total amount of interest you pay over the term of your Mortgage. Your Mortgage advisor will detail these fees and the terms on which they are payable in your Key Facts Illustration.

Disclaimer

James Raynor is Authorised and Reulated by the FSA (463141). You may be charged a fee for the processing of your application and this fee and we estimate that this fee will be £195. Your Home is at risk if you do not keep up the repayments of a Mortgage or any other loan secured against it.