Cost of Buying
Deposit
When contracts are exchanged a deposit is usually required and paid through your solicitor. This is a percentage of the purchase price arranged with agent and vendor – usually between 5% and 10%.
Valuation/Survey
To ensure that the property is an acceptable security for a loan, the mortgage lender’s surveyor will need to inspect and value the property. The cost, if any, of this valuation depends upon which lender you choose.
Legal Costs
Usually a solicitor or licensed conveyancer needs to be appointed to deal with the legal aspects of purchasing a property. This will incur costs. You can ask for an estimate of these costs before you instruct the legal expert.
Local Authority Search
Your legal adviser will carry out a local authority search to discover if there are any plans for future developments that could affect the value and purchase of your chosen property.
Local Search
This verifies legal ownership of the property and registers the owner at that address.
Stamp Duty
This is a government tax based on the property’s purchase price and is calculated as follows:
Up to £60K – Nil, £60K - £250K – 1%, £250K - £500K – 3%, £500K+ – 4%.
Arrangement Fee
Most lenders charge an arrangement or application fee for a mortgage. Some lenders will allow you to add this to the mortgage and the fee varies depending on the lender chosen and the mortgage offer.
Higher Lending Fee- (Also known as Mortgage Indemnity Premium or High Lending Fee).
This is an insurance policy designed to protect the lender against losses incurred if the property needs to be taken into possession because of arrears. This insurance is commonly used for high loan to value mortgages, where the value of the property is not much more than the requested amount of the loan. This charge is usually passed on to the borrower but it is important to remember that this is insurance for the lender, not the borrower, but paid for by you.