|
Arranging the deposit and the mortgage is often the first thing that people think about when purchasing there own property. But you must remember to consider all the other costs as well, such as; fees for solicitors and surveyors and stamp duty. Others such as mortgage protection become long term commitments.
ADDITIONAL SECURITY
Most lenders will consider lending up to 75% of the purchase price/valuation of your property.
If you wish to borrow more than this, the lender may need additional security. This usually comes in the form of an insurance policy known as ‘mortgage indemnity’ and is arranged by the lender for their benefit.
You may have to pay a one off premium for this. (This is sometimes known as a ‘High Percentage Lending Fee’ or a ‘Mortgage Indemnity Guarantee premium’) If you do, most lenders will allow you to add it to the mortgage amount.
The insurance policy covers any loss if the lender has to reposess, then sells your property but does not recover the full mortgage amount from the sale. If this happens, you remain liable for any shortfall on the mortgage. Even if the lender has insurance in place, the insurer generally has the right to recover the shortfall from you.
SURVEYS
VALUATION REPORT
Your lender will charge you a fee for a surveyor to value your prospective property.
This is done for the lenders benefit, to confirm the property is adequate security for the loan. It should tell you if there is something seriously wrong with the property, but this does not involve a detailed inspection.
The percentage of the value you can borrow will be based on the figure in the report, and not necessarily on the price with the seller.
OTHER SURVEYS
It is advisable to arrange your own survey. If you are purchasing an older property or planning to live in an area that has suffered from subsidence in the past, a survey will highlight these problems.
You may be able to save money by using the same surveyor who carries out the lenders valuation.
A ‘homebuyers’ report is usually more comprehensive than the lenders report and this will tell you whether the property is structurally sound or not. But it gives no guarantees. A full structural survey costs more but gives the guarantee of legal protection against incorrect information.
TAX
STAMP DUTY
Stamp duty is a tax on property purchases, and applies to all properties over £60,000 as the chart below shows. Stamp duty is collected by your solicitor.
Since November 2001, stamp duty has been abolished for certain property transactions in designated areas to help regeneration. Your solicitor or the Inland Revenue can advise you of the designated areas.
| PURCHASE PRICE |
STAMP DUTY PAYABLE |
| Up to £120,000 |
0% |
| £120,001-£250,000 |
1% OF THE PURCHASE PRICE |
| £250,001-£500,000 |
3% OF THE PURCHASE PRICE |
| £500,001 or more |
4% OF THE PURCHASE PRICE |
Subject to change (normally each budget).
SOLICITORS
As well as paying your solicitor or licensed conveyancer for the work carried out, the cost of land registry charges and local search fees will be accountable by you.
The whole process ensures that once the sale goes through, the property really belongs to you and that you are fully aware of any factors affecting the property.
APPLICATION FEES
Application fees to cover initial administration covers may be charged by some lenders.
Fees are usually added in conjunction with limited offers like fixed rate deals and you may find they are not refundable if your purchase falls through.
Some lenders offer mortgage deals with cashback which cover some or all of these.
Your mortgage adviser or lender can prepare a full written quotation which shows how much you will have to pay each month and what the upfront charges are.
It may also be helpful to look at the annual percentage rate (APR) on your mortgage quotation. This should account for the true cost of the mortgage, including everything you have to pay to get the loan, like an application fee or mortgage indemnity charge.
But please be aware that the APR spreads upfront charges over the whole period of the loan, even though most people move home every 7 years, so the charges can make more difference than the APR implies.
Complete the form below and an advisor will contact you to discuss your requirements.
Alternatively you can contact us directly on
01843 852 500
*Please complete at least the required fields
|
.JPG)
