Our Step by Step Mortgage Planner
What fees should IT contractors expect?
All fees in relation to the mortgage will be confirmed in a Key Facts Mortgage illustration which you will be issued with at the beginning of the process
Valuation fee, budget £300-600
A valuation fee, often depending on the property price, will be charged by the proposed lender.
It is worth commissioning your own survey. There are different levels of detail you can specify from a simple, relatively inexpensive basic report to full structural surveys and specialist reports, which cover trees, electrical systems, damp, and other conditions. You should consider commissioning a full structural survey – especially if the property is old, unusual construction or could be in need of repair.
Booking or processing fee
When you apply for a mortgage, we will ask you to pay a processing fee.
Completion or arrangement fee, budget £600-2000
An arrangement fee is often charged once the mortgage is complete. This is usually added to the loan.
Your initial mortgage consultation is obligation free. Our typical fee to engage a new client is £495 although we may charge a fee of up to 1% of the total amount borrowed. For example, if the total amount borrowed is £150,000 our 1% charge would be £1,500. However, we only charge up to 1% of the total amount borrowed if the case is particularly complex.
Higher Lending Charge
The lender’s insurer can charge a higher lending charge (HLC) fee if the loan amount is over 75% of the property valuation. Some lenders will pay this for you if the Loan-to-Value is less than 90%. The fee can be added to the mortgage or paid separately.
Legal fees, budget £500-£3000
When you purchase a property and apply for a mortgage, or if you are re-mortgaging, you’ll need a solicitor or licensed conveyancer to carry out the legal work for you. You’ll also need to budget for necessary land registry and local authority searches, often referred to as disbursements. Ask for a quotation beforehand.
This is a government tax on property costing more than £60,000. This will vary depending on the value of the property.
1% of purchase price between £125,001 – £250,000
3% of purchase price between £250,001 – £500,000
4% of purchase price over £500,001 – £1,000,000
5% of purchase price over £1,000,001
Get three quotes and check the insurance and packing methods.
Mortgage administration fee
Once your mortgage is active you may be charged an administration fee if you require further services such as additional loans or changes to your mortgage deeds.
You should insure your home for at least the full rebuilding cost against damage caused by major risks such as fire, flood and subsidence. You could extend your level of cover to include full accidental damage. The amount may not be the same as the market value of the property.
This is designed to protect all the things in your home, which are not fixtures or fittings. You can usually tailor contents insurance cover to suit your own particular needs.
If you become unemployed, or an accident or sickness prevents you from working, this cover ensures that your mortgage payments are covered. You can usually extend your cover to include other regular expenses such as endowment premiums and utility bills.
If you’re self employed, you won’t be able to claim unless you’ve actually stopped trading. And workers on short-term contracts may not be able to claim until they have been in the same job for a year with the contract renewed within this period
Most people arrange life assurance cover to pay off the outstanding mortgage loan if they die. If your mortgage is backed by an endowment policy, life cover is automatically included, but you can easily add it to a pension backed mortgage or take out a separate policy
Early redemption penalties / Early repayment charges
Most mortgage deals tend to have a short life. Whatever the term, if you come out of the deal before it ends, you will have to pay an Early redemption penalty which in most cases is charged as a percentage of the loan. There are products without any early redemption penalties and some lenders charge an administration fee when you redeem your mortgage also.