Below are some of the costs associated with a mortgage application that you need to be aware of:
HIPs
If you're selling your house you may need a HIP - take a look at our HIPs section for more details.
Application fee
An administration/arrangement charge payable upon application. This fee is non-refundable and may vary between products.
Valuation fee
You will be required to pay for a report to establish the value of the property. Most lenders will require this report before making the loan available.
If you are purchasing a property, please contact us if you require a Home Buyers Report or a Building Survey. A mortgage valuation alone may not be suitable for your needs.
CHAPS
It is our practice to send the mortgage advance to your conveyancer by CHAPS, and the charge of £25 will be debited to your account, or to avoid incurring further interest charges, you can pay it on completion.
Completion fee
This covers our work in the setting up of the mortgage - when the money to buy your new home is released to the seller or when your remortgage completes. After this, you can move in! This fee will be added to your mortgage on completion and will incur interest as part of the loan, or to avoid incurring further interest, you can pay it on completion.
This fee is product specific, and may vary between products.
Deposit
You will need to find the difference between the amount you are borrowing and the price of the property. This is likely to be the biggest expense for first-time buyers. Buyers already on the property ladder, who have a house to sell at the same time, are likely to use some of the equity built up in the house being sold.
Conveyancing costs
You will need to employ a conveyancer (solicitor or licensed conveyancer) to handle the legal aspects of buying your home or remortgage, if this is with the aid of a mortgage. The conveyancer usually acts for you and the lender.
The costs your conveyancer deals with on a purchase, which you will be required to pay, include:
- Stamp Duty Land Tax: a tiered government tax on the price you pay for your home on properties starting at a value of £120,000
- search costs - the cost for carrying out searches on your behalf such as with the Local Authority and Land Registry.
Your conveyancer will also charge you for the work they carry out such as:
- dealing with enquiries
- drafting contract for sale/reviewing contract on purchase
- confirming legal boundaries
- arranging completion/preparing the document which transfers legal ownership.
Full details of individual charges which apply to your loan will be included in your Key Facts Illustration (KFI). A Tariff of Charges which show other charges which may apply, eg if you apply to let your property, is available on request and will be included in any Mortgage Offer made.