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MORTGAGES EXPLAINED!
#2 COSTS / FEES
If you haven’t seen the first thread, I covered who to speak to/who’s involved when purchasing.
Check that if you haven’t already as this thread leads on from that!
As always RT’s appreciated.
#2 COSTS / FEES
If you haven’t seen the first thread, I covered who to speak to/who’s involved when purchasing.
Check that if you haven’t already as this thread leads on from that!
As always RT’s appreciated.
WHAT SHOULD YOU BUDGET FOR?
There are various fees and costs, I’ll outline what fees you could incur, roughly how much it may be (These are based on my local area and experience, but are similar nationwide in the UK).
There are various fees and costs, I’ll outline what fees you could incur, roughly how much it may be (These are based on my local area and experience, but are similar nationwide in the UK).
N.B
These are the fees on top of your deposit and purchase price, which you should discuss with an adviser to establish how much deposit you’ll need!
These are the fees on top of your deposit and purchase price, which you should discuss with an adviser to establish how much deposit you’ll need!
MORTGAGE BROKER FEE £0 - £500
Brokers will charge for their services usually, but some are ‘Fee Free’. Brokers that value their time will charge a fee. There's a lot of background work that you may not realise. Such as lender research, admin, liaising w other parties, processing
Brokers will charge for their services usually, but some are ‘Fee Free’. Brokers that value their time will charge a fee. There's a lot of background work that you may not realise. Such as lender research, admin, liaising w other parties, processing
If you want a good quality, thorough adviser, they’re more than likely going to charge you for their expertise!
The saying you get what you pay for applies here.
Broker fees are most commonly charged when you submit an application - initial/first consultation is normally free
The saying you get what you pay for applies here.
Broker fees are most commonly charged when you submit an application - initial/first consultation is normally free
SOLICITORS £1,400 - £2,000
All solicitors will charge a different amount, but the average I see is around £1,600. This is based on a standard purchase.
All solicitors will charge a different amount, but the average I see is around £1,600. This is based on a standard purchase.
Anything ‘non standard’ such as Help to Buy, Shared Ownership, ISA’s, adding parents/guarantors and everything else that isn’t as part of a normal transaction may incur additional fees.
Solicitors will send you a breakdown of all the charges applicable and include the total.
Solicitors will send you a breakdown of all the charges applicable and include the total.
STAMP DUTY LAND TAX (SDLT) £????
Stamp Duty is tax you have to pay when buying a property. The amount of stamp duty paid is dependent upon the properties price and if you are a first time buyer or not and whether you’ll own more than 2 properties or not on completion (moving in)
Stamp Duty is tax you have to pay when buying a property. The amount of stamp duty paid is dependent upon the properties price and if you are a first time buyer or not and whether you’ll own more than 2 properties or not on completion (moving in)
If you’re a first time buyer, purchasing under £300,000 there is no stamp duty.
It’s best to use a calculator to see if you will incur stamp duty, see below:
https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
Stamp Duty is quoted by your solicitor and paid to the solicitor with your completion funds.
It’s best to use a calculator to see if you will incur stamp duty, see below:
https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
Stamp Duty is quoted by your solicitor and paid to the solicitor with your completion funds.
VALUATION/SURVEY FEE £0 - £1,000
A Valuation or Survey is the same thing, however referred to with two names.
This is where/how you can obtain a report on the properties condition, value etc
There are 3 levels to a valuation.
A Valuation or Survey is the same thing, however referred to with two names.
This is where/how you can obtain a report on the properties condition, value etc
There are 3 levels to a valuation.
1. Mortgage Valuation £0 - £300. This is to determine if the lender is happy to lend based on the property you’re buying. They'll check the property construction, condition, subsidence and any other defect that may impact the ‘Saleability’ of the property. (How easy to sell)
2. Home Buyers Report / Condition Report. £250 - £500. This is a more in-depth report for the buyer(you). The surveyor will check the property in finer detail and compile a report. This is mostly on internal factors. This does check the structure in depth.
3. Full Structural Report £600 - £1,000. This is the full works on the property. An in-depth condition report as well as a thorough check of the property build and the structural strength. Usually only opted for by people buying old properties (1920 or before)- if concerned
Lenders will sometimes offer a ‘Free Mortgage Valuation’ / 'Basic Valuation' so the buyer will not have to pay for the basic report to be put together for the lender mortgage decision.
LENDER ARRANGEMENT/PRODUCT FEE £0 - £1,499
Lenders may charge you a fee for the deal you choose. This can vary but most commonly is £999. They may allow you to add this fee onto the mortgage so you do not have to pay it up-front, but you’ll pay interest on this.
Lenders may charge you a fee for the deal you choose. This can vary but most commonly is £999. They may allow you to add this fee onto the mortgage so you do not have to pay it up-front, but you’ll pay interest on this.
They may even have a product that has NO (£0) fee, but usually a higher interest rate.
That’s why it’s best to check the ‘Total Cost’ - to establish which is a cheaper deal. Your adviser can help with this.
That’s why it’s best to check the ‘Total Cost’ - to establish which is a cheaper deal. Your adviser can help with this.
ESTATE AGENT FEE (SELLING ONLY) £???
This is ONLY if you are selling your property via an estate agent. The classic fee is 1% of the property sale price plus VAT. This can come out of your home equity on completion of the sale.
So like stamp duty, fee will depend on sale price.
This is ONLY if you are selling your property via an estate agent. The classic fee is 1% of the property sale price plus VAT. This can come out of your home equity on completion of the sale.
So like stamp duty, fee will depend on sale price.
These are your main fees and charges.
As a first time buyer, look to budget £2,500 if buying for £300k or less. Over this you will need to factor in stamp duty.
You don't always need to pay for a valuation and lender fees can be absorbed into the mortgage.
As a first time buyer, look to budget £2,500 if buying for £300k or less. Over this you will need to factor in stamp duty.
You don't always need to pay for a valuation and lender fees can be absorbed into the mortgage.
Stamp duty is 5% of the portion above £300k. For first time buyers ONLY
Example..
So £400k Price.. £100k portion over £300k.
£100k x 5% = £5,000 Stamp Duty
Example..
So £400k Price.. £100k portion over £300k.
£100k x 5% = £5,000 Stamp Duty
So that's Part 2 covering fees.
Part 3 will be the process, timescales and milestones.
If you have any questions please let me know!
Any RT’s appreciated!
Part 3 will be the process, timescales and milestones.
If you have any questions please let me know!
Any RT’s appreciated!
PLEASE DO NOT TAKE THIS AS FINANCIAL ADVICE - YOU SHOULD GET INDEPENDENT ADVICE TAILORED TO YOUR CIRCUMSTANCES.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
