Associated Costs

A Mortgage Is Just One Of Many Costs

In addition to future mortgage payments and any redemption or penalty fees that may apply, there are a number of additional costs associated with buying or remortgaging a property that should be considered:


- Deposit: Although some lenders used to offer mortgages up to the full purchase price of a property, it is usual of the borrower to contribute some of the amount. The size of the deposit will affect the amount you need and are able to borrow as well as the cost of your loan. So the larger the deposit in relation to the loan, the better the rate available.

- Solicitor Fees: Charges for 'conveyancing' will depend on a number of things including the value of the property. It is advisable to get a quote from a number of solicitors for this service. The following costs are usually also payable via your solicitor:

(i)   Variety of Searches including: HM Land Registry Search, Local Authority Search, Bankruptcy, Drainage and Water Search, Environmental and Chancery Search.

(ii)  Land Registry: You must pay a fee to register yourself as the new owner with the central record of land ownership.

iii) Stamp Duty Land Tax (SDLT)*: This one-off tax payment is a graduated payment based on the purchase price of your home:
- You pay no tax on the first £125,000
- You pay 2% tax between £125,001 and £250,000
- You pay 5% tax between £250,001 and £925,000
- You pay 10% tax between £925,001 and £1,500,000
- You pay 12% tax upon any part of the purhcase price above £1,500,000

An additional 3% SDLT will be charged at all levels for all additional residential properties with a purchase price in excess of £40,000 e.g.Buy to Lets or Holiday Homes.

Valuation and Surveys: For their own benefit lenders will want to check the condition and marketability of your chosen home. They will use a qualified surveyor to make this assessment and provide a current valuation. This type of survey is called a 'Valuation report'. The fee is usually based on your home's value. For an additional cost you can get a more detailed 'Homebuyers report' or for much older properties or those with defects a full Structural Survey may more appropriate.

- Lenders Fees: Depending on the lender and the product, additional fees may be payable. Our advisors will stipulate whether or not these are included in the mortgage application:
- Lenders Arrangement or Completion Fee
- Lenders Legal Fees
- Lenders Valuation Fees
- High Lending Fee

- Mortgage Broker Fees: At Harrington & Horne charge a minimum fee for our mortgage advice of £750. However, this is only payable where we are not remunerated to this level by the lender we recommend.

- Building & Contents Insurance: The insurance of the property against fire and other risks will normally be a condition of the mortgage loan. You may also wish to insure your contents.

- Personal Insurance: To ensure that in the event of death, illness, accident or unemployment you, your family and home are protected.

- Removal Expenses: The cost will depend upon the quantity of your possessions and the distance involved.

- Utility Costs: Gas, Water, Electricity and Telephone connection or transfer costs may be payable.

- Council Tax: Find out from your local authority what band your property is to determine what your payments will be.

- Home Improvements: Consider the costs of any immediate work that may need to be undertaken e.g. Damp Proofing, Roof Repairs, Plumbing, Rewiring.

- Mail Redirection: The costs of redirecting your existing mail to your new address.

- Emergency Fund: Things always cost more than you bargained for!

*correct as at 6th April 2016

 

 




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