Fees and charges you pay when buying a home

When considering the costs of buying a home, the deposit you put down is just part of the overall expenditure. There are other payments you need to factor in, such as mortgage fees, legal costs and removal charges.

Arrangement fees

Most mortgage lenders will charge an arrangement fee for setting up the loan or arranging the mortgage. These are costs that go directly to the lender, they are not charges imposed by us as a mortgage adviser.

You can get deals without fees, but they are likely to increase the interest rate you pay.

Fees will vary between lenders, and some lenders will allow you to add the fees onto your mortgage, rather than pay them upfront.

Higher lending charges

A small number of lenders apply these charges if your loan-to-value ratio (LTV) is high. For example, if you are a first-time buyer wanting to borrow 95% of the property value, they may charge extra as you pose a higher risk. The charge covers their insurance fees in case you default on your repayment.

Home insurance

Mortgage lenders require you to have buildings insurance for your new home. You can take out home contents insurance as well, to cover your belongings. There are options to get separate or joint buildings insurance and home contents insurance. Find out more about home insurance or get an insurance quote now.

Land registry fees

As with stamp duty (see below), this will vary depending on the value of the property.

Legal/solicitors' fees

A solicitor is needed to assist in the legal aspects of moving home, such as transferring the legal title of a property from the property seller to you, the new owner. This varies across solicitors and is dependent on your location. You will need to ask for a quote.

Removal fees

The extent of your belongings will determine how big a removal van you’ll require. If you can hire a van or do it yourself it will almost certainly be cheaper. But if you own a lot of belongings, you might want to enlist the services of a removal company. The cost will depend on how much you have to move and how far.

Searches

A ‘search’ is when your conveyancer requests information from the local authority to confirm details about any planned developments, disputes or roadworks that may affect the property.

Stamp duty

Usually, any property bought in the UK over the value of £125,000 has to pay stamp duty and the amount will vary depending on the purchase price.

Property purchases from 1st July 2021 to 30th September 2021
The SDLT thresholds will change during this period to: 
  • £250,000 for residential properties
  • £150,000 for non-residential land and properties
  • £300,000 for first-time buyers.
Property purchases from 1st October 2021 
  • £125,000 for residential properties
  • £150,000 for non-residential land and properties
  • £300,000 for first-time buyers.

Valuation costs

Your lender has to make sure that the property is worth the value it’s stated to be. This is done through a valuation. Costs vary depending on who carries out the valuation. Some lenders also offer free valuations.

Get expert mortgage advice

While the internet is a great source for research, it’s well worth taking mortgage advice before you embark on buying a property. Expert mortgage advisers at Mortgage Advice Bureau are qualified and experienced in looking at thousands of mortgage from over 90 different lenders to find the deal to suit your needs.

Their advisers are committed to helping you make the right mortgage choice and will give you a dedicated mortgage adviser who will help you throughout the whole process so you can have confidence that you’ll receive advice tailored to your needs.

Answer some mortgage related questions and an adviser will give you a call to discuss your options. Or you can visit your nearest building society branch.

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