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Stamp Duty, Fees and Surveys

When buying a new home or remortgaging there are various fees that may apply.

Not all will be due in every situation but we summarise the main fees below. Many will vary depending on the value of the property or mortgage.

We will advise you of all the fees you will incur in your own circumstances.

Mortgage arrangement/application fees

Most lenders charge an arrangement/application fee when taking out a mortgage. These fees vary according to which lender you use. Less common are completion fees which are sometimes charged as well on the day of completion.

Reservation fees

This is a fee paid upfront to some lenders. It is a fee to secure the funds you want to borrow where there are limited funds for a particular mortgage deal. It is also known as an application fee, reservation fee or booking fee. These fees are not normally refundable if the you fail to go ahead.

Higher lending charge

This is not charged by all lenders, but where you borrow a high loan to value percentage such as more than 75% of the property price you may have to pay this.

Valuation and survey fees

When applying for a mortgage a valuation will need to be carried out on the property. This is instructed by the lender and will tell you how much the property is worth. The purpose is for the lender to ensure they have sufficient security to recover their mortgage should you default. The borrower will usually have to pay for the valuation on application but there are deals with free valuations.

The difference between a valuation and a survey is that the survey will look at the structure of the property to establish if there are any faults.

There are 3 different types of survey...

  1. Basic valuation – carried out on behalf of the lender although in most instances you will have to pay for it. You don’t have any comeback against the surveyor for any problems overlooked in this report. The report is very basic and the lender will not take any responsibility for the condition of the property.
  2. Homebuyers survey – still quite a basic survey, you get a valuation of the property and also reports on the condition of the property that the surveyor may spot.
  3. Full structural survey – the surveyor should spot any major defects with the property and if not you may have a legal claim against the surveyor.

Legal fees

Conveyancing deals with the legal process of transferring ownership of a property from the vendor to the purchaser.

Fees dealt with by solicitors include their fee for the work, land registry fee, search fees and telegraphic transfer fees.

On a mortgage they will often work on behalf of the mortgage company with a charge for their legal work as well.

Soem mortgage deals come with free legals in respect of the work of the solicitor.

Early repayment charge

This is a charge by the lender if you pay your mortgage off early. Often the level of charge will decrease the nearer to the end of the mortgage product period. Overpayments of 10% are often allowed without incurring a charge.

Estate agent fees

Estate agents charge different fees to the vendor when selling a property, usually a percentage of the sale price on a no sale no fee basis and are usually paid on completion.

Broker fees

Broker fees are charged for giving expert advice to you in taking out a mortgage and can vary from case to case. The fees are normally paid on application.

Stamp duty land tax

When you purchase a property you may have to pay stamp duty land tax(SDLT). On purchase prices up to £125,000 there is no stamp duty.

Removals

Most people buying or selling a property will need to hire the help of a removal company. The costs in these vary considerably and is worth shopping around for the best price.

We can help advise you on costs, how to minimise them and when not to go for what appears to be the cheapest option!

Your Next Step...

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