Here the most common costs associated with arranging a remortgage and buying a house are explained.
It is possible that some of these costs will not be needed and some may be met by the chosen Lender, and some may be added to the loan taken from the Lender. We will consider each of these elements when recommending a mortgage and when discussing your individual circumstances.
We charge a fee arranging a mortgage – but we will keep our fees as low as possible and only charge for the work we necessarily do to arrange your mortgage. We charge no fees up-front and we will notify you of our fee before you incur any charge – so you can confidently complete our enquiry forms without worrying that you will be charge for doing so. Please see our separate page on fees.
If you are changing your current mortgage you need to know your outstanding mortgage balance, including any redemption penalties you may or may not have.
If you have a redemption penalty you might want to time your current house sale or remortgage to avoid or reduce any redemption penalty.
Lenders will want to value your property so that they can be confident that they are not lending too much money to you - they want to be sure that they can get their money back it you stopped paying them. However as property prices fluctuate you must remember that the future value could fall as well as rise. The cost of the valuation varies between Lenders and the value of the property. The cost can normally be added to the amount you borrow, and in some cases the Lender will waive the fee.
These are more comprehensive than a Lender's valuation - and more costly. Prices vary between surveyors. In both cases a qualified surveyor will inspect the property to see if there are any defects that should be brought to your attention, and will advise on the value of the property. As property prices fluctuate, the future value of the property could fall as well as rise.
Also known as Mortgage Indemnity Guarantee, this one-off charge is levied by the Lender to those borrowing more than a certain percentage of the value of the property. The charge varies from Lender to Lender and also between individual mortgage products offered by a Lender. The charge increases with the percentage of the house value borrowed and can start if borrowing as little as 70% of the house value. We will look to see if you would be better off by choosing a mortgage with a lower or waived charge.
Your solicitor will charge fees for the legal and other work done to ensure that your interests are properly safeguarded. Work undertaken includes, for example, ensuring that the legal title for a purchased property is properly transferred to you. You can expect these fees to be less when re-mortgaging than when purchasing a property. We will look to see if you would be better off by choosing a mortgage where the Lender pays all of these fees or contributes towards them. You should check the cost of these charges with the solicitor you choose to appoint.
Your solicitor will arrange for local authority records to be searched for information about planning applications and other matters. Your solicitor will have to pay a fee for this information.
Your solicitor will check that the property has been properly registered and that it is owned by person selling it to you.
Your solicitor will check that the person selling the property is not bankrupt
Your Lender will charge a fee for transferring the money to pay for your new property.
This tax is payable on conveyance and assignment of property. There is an exemption in some areas and your solicitor will advise you if it applies in your case. It is calculated at a single rate as a percentage of the purchase price and varies according to which band your property falls within.
As the tax is charged at a single rate a property for example bought for £300,000 would require payment of £9,000 - the entire amount is charged at 3%.
Your mortgage is secured against the value of your property. The Lender will naturally want to ensure that their money is safe should your home suffer a disaster such as a fire or flood. They will therefore insist that you take out adequate insurance to cover such eventualities. This of course is also in your best interests.
It is common to link buildings insurance with contents insurance within a single policy
For this, and other types of insurance see our other information pages about insurances