There
are obviously going to be some fees at the beginning of a
mortgage. These fees and their descriptions vary widely
between mortgage lenders, and there are sometimes a few charges
you don't expect.
Bear
in mind that not all lenders charge all of these fees, but
many do. Here is our list of the fees you might have to pay
before you even move in:
Set up Fees / Arrangement Fees, Booking or Reservation Fees
Arrangement
fees, bookingfees and reservationfees are all the same thing,
and are charged by virtually all lenders when they allocate
the money for your loan, guaranteeing your mortgage deal.
It
is hard to indicate typical costs for these as they vary
depending on the mortgage lenders. Some lenders may be running
offers where these costs have been discounted.
The
current average is nearly £800.
Most
deals now come with a fee of at least £500, and although
cheaper ones are available, they may not be competitive
in other ways.
Some
lenders ask as much as £2000 ! (Sorry. Only £1,999)
Higher
Lending Charges (HLC) are applied by some lenders
to borrowers seeking a loan of more than 90% of the value
of their property. They can be very pricey indeed, so make
sure you understand if they will apply to you or not.
This
can also be called an indemnity
guarantee, additional
security fee ormortgage
advance premium.
If
you are buying a new property, you may only need your lender's
mortgage valuation report, but even this can have
a fee associated with it. Read more about Valuation
and Survey Costs
If
you are buying an older property, you will certainly want
at least a Homebuyers Report (a basic survey), or even a
full structural survey for very old or run-down properties.
Read more on homebuying
valuations and surveys
The
legal process of buying a property is called conveyancing.
This could cost you about
£350 plus VAT for a £100,000 purchase
Add
to this the legal Search fees (c £100), Land Registry
fees (c £100)
You
will also usually have to pay the legal and telegraphic
transfer costs directly to your solicitor, unless
your bank or building society has arranged a solicitor for
you. These depend on the purchase price ie the amount of
money to transfer. For a £200,000 sale it would be
about £25.
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