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Mortgage Fees and Costs
Valuation Fee
Most lenders charge for assessing whether or not the property is adequate security against the mortgage. This fee will need to be paid on application and is not usually refunded should the application not proceed. At present, a number of lenders are doing this for FREE or REFUNDING the cost at completion.
If you require a more in-depth view of the property, you can select a Homebuyers Survey or a full Buildings Survey.
Arrangement Fee
Some lenders will charge an arrangement fee when you place a mortgage with them. This is normally when a fixed rate is applied for and can usually be added to the loan.
Higher Lending Charge
This is a one-off insurance premium that some lenders charge if the loan to value exceeds 90%. Although some lenders still charge the premium if the loan to value exceeds 75%. A number of lenders may waive this fee at 95% and 100%. If charged, it may be added to the loan. The Higher Lending Fee can be several thousands of pounds and protects the lender not you against any losses if repossession occurs and the subsequent sale proceeds produce insufficient funds to repay the entire mortgage. The insurance company can then sue you to recover the money they have paid to the lender.
Stamp Duty
This is a Government tax applied once the purchase exceeds £125,001 and is payable at the following rates:
£125,001 to £250,000 at 1% - (175,001 to £250,001 until 2nd September 2009)
£250,001 to £500,000 at 3%
£500,001 plus at 4%
Stamp duty is payable on the whole amount of the mortgage at the prevailing rate. In some areas, Stamp Duty is exempted up to a property value of £150,000, details can be found at the Inland Revenue.
Solicitor Fees
A solicitor is required to carry out all the legal contract work on your behalf including completing local searches etc. and the typical cost of this excluding disbursements is between £400 to £600. Costs for searches can be in the region of £300 to £400.
Your home may be repossessed if you do not keep up repayments on your mortgage
Michael Knight Mortgages is an appointed representative of Mortgage Broking Services Limited, which is authorised and regulated by the Financial Services Authority for regulated mortgage and insurance business only. Mortgage Broking Services Limited is entered on the FSA register (http://fsa.gov.uk) under reference 306012.
