You may wish to take a more detailed survey of the property such as a Homebuyers report or a full structural survey report. The surveyor will produce a more detailed report on the condition of the property, highlighting problem areas such as damp and structural movement.

The cost for a valuation depends on the value of the property and the lender you choose; they may include a processing charge to cover the administration work involved.

Homebuyers and full structural reports cost more than a standard mortgage valuation report, but they offer you some protection.

Lenders’ Fee
Most mortgage products are priced using interest rates and product fees. Depending on the lender and the product these are referred to as: booking fee, product fee, application fee, completion fee etc

Some lenders allow borrowers to add these fees to the loan amount on completion.

Mortgage Consultation Fee
You may be charged a fee by your mortgage adviser and this varies for each adviser. All fees will be disclosed to you at your initial contact with the adviser. Most initial advice is free and fees are only payable when you apply for a mortgage.

Higher lending charges (HLC)
Many lenders will require extra security if the level of borrowing compared to the value of the property exceeds what they deem to be an acceptable risk. In a situation like this the lender can use an insurance policy to cover the  additional risk, or it can create a separate pool of money. If you pay for this it is called the Higher Lending Charge.

This charge is usually levied when you borrow a very high percentage of the value of the property and the lender feels that if it needed to repossess the house from you at a future date it may not recover all of the mortgage and costs from the sale of your property.

This is a possible cost that needs to be taken into consideration when reviewing your options.

We would like to point out that this is security for the lender and not for you, and will allow the lender to reclaim some, or all, of its losses if you default on your repayments and they need to repossess your property. If any claim has been made by the lender, the insurance company has the right to pursue you for the claim. While you may think this is an unfair cost, it may allow you to borrow a higher percentage of the property value.

Legal Costs
These costs do vary and you should obtain quotations at the outset from your solicitors. Firms of solicitors usually charge more for higher value properties. They will charge more if the property is a leasehold rather than freehold because these cases are more complicated. You do not need to hire a solicitor, you can hire a licensed conveyancer and these people are usually cheaper. However if any complications arise during the buying process you may wish you had paid extra for a solicitor. The cost of your legal representative varies between £500 and £2000. For most transactions it should not be necessary to pay a solicitor more than £800-£1000.

Stamp Duty Land Tax
This is a tiered government tax based on the price of your property. Currently properties up to a purchase price of £175,000 are exempt. Up to £250,000 the tax is 1%. Up to £500,000 the tax is 3% and you pay a 4% tax on all properties that cost more than £500,000

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By Amar Dhanota
Senior Mortgage Consultant
Mortgages For Professionals
T: 020 7553 3251
E: ad@mortgagesforprofessionals.com
W: www.mortgagesforprofessionals.com

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Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice, the precise amount of the fee will depend upon your circumstances but we estimate that it will be 1% of the loan amount.

Mortgages for Professionals is a trading style of Expertinfo Ltd, which is an Appointed Representative of Bond Finance Ltd.