Estimated costs of buying and moving
When you buy a property or move home, there will be a number of upfront fees, which you’ll need to take into account when working out your overall budget.
The below list is a rough guide only and intended just to make you aware of potential fees so that you can investigate further. Hadley-Clarke Mortgages accept no liability or responsibility for actual costs which may differ considerably from those outlined below.
Lender Mortgage Fees
These may include a booking fee of £100 – £250 and/or an arrangement fee of up to £2,000 charged by the lender to process your mortgage application. You may be able to add this to the loan. There are pros and cons to doing this. On one hand it is best to pay these upfront rather than adding them to your mortgage if possible, otherwise you could be paying interest on them for the life of the mortgage. On the other hand adding the fee to the loan may be a good idea as some providers do not refund the fee if they reject your application or you pull out of the mortgage before completion. If you have an overpayment facility on your mortgage, you may be able to add the fees and then immediately repay them upon completion.
Mortgage Valuation Fee
If you need a mortgage, your lender will ask you to pay for a mortgage valuation report (MVR) to establish how much the property is worth and how much they are prepared to lend. The cost of a basic mortgage valuation costs about £250 – £450, depending on the size and cost of the property. The lender’s valuation is not an extensive survey and will not necessarily identify all the repairs or maintenance that might be needed. For added protection, you may want to pay for a more comprehensive survey to be done.
There may be a fee for mortgage advice. Many Brokers charge a fee and the amount they charge varies from Broker to Broker. Hadley-Clarke Mortgages does NOT charge a fee for Mortgage or Protection Advice
Higher Lending Charge
If you borrow a high percentage of your property’s value, your lender may ask that you obtain indemnity insurance to cover you if you can’t keep up the mortgage repayments. Typically, if someone borrows less than 90% of the purchase price of a property, the provider does not seek further security, other than the property itself, as the likelihood of loss is low. Above this percentage and the provider is likely to insure against loss. The calculation for this charge varies between lenders; it is usually a percentage but charged on only proportion of your mortgage amount, e.g. 7% on the amount over 75%. As a rough indication, expect to pay roughly £1,500 – £3,000.
There are lenders that offer 95% mortgages and require only a 5% deposit (for example, when buying a £200,000 home, 5% deposit will be £10,000). A larger deposit may increase your chances of getting a mortgage and may also get you a better interest rate. A larger deposit will also give you more options, as many mortgage lenders require that you pay at least 10% of the purchase price as a deposit. The Government’s Help to Buy scheme and other housing schemes only require a 5% deposit (terms and conditions apply).
Stamp Duty Land Tax
This is a government tax paid on homes costing above £125,000. Please refer to the Stamp Duty section of this website for further information.
Independent Surveyor’s fee
Before you buy a house you may want to have it checked out by a surveyor. This is vital so that you understand if there are any issues with the property before you buy – either a homebuyers report or a full structural survey. A homebuyers report costs about £300 – £600, whilst a full structural survey can cost up to £1,000, again depending on the property. Paying for a good survey could save you money on repairs further down the line.
You will need a solicitor or licenced conveyancer to carry out all the legal work when buying and selling your home. The legal fees are typically £500 – £1,500 including VAT at 20%. Solicitors will also do local searches to check whether there are any local plans or issues. Generally they recommend around five searches, which altogether cost about £300.
Electronic Transfer Fee
This fee typically costs £40 – £50 and covers the lenders costs of transferring the mortgage money from the lender to the solicitor (solicitors often include this as part of their quote).
Estate Agent’s Fee
This is only paid by sellers, not buyers. The estate agent’s services are negotiated and agreed when the sellers put the property on the market and is usually 1% to 2% of the sale price plus 20% VAT. There are some Estate Agents that offer a fixed fee service, these are mainly online Estate Agents.
Typically £400 – £900, although you could do it yourself. Removal firms often charge more at weekends and at the end of the month.