Buying a property costs

Mortgage Costs

Mortgage Repayments
Your monthly mortgage repayment will depend on the size of the loan, the type of mortgage you have taken, and the repayment period that you have agreed upon. The differences between deals  are big,  so always do your research and compare the costs.

If you need to borrow a large percentage of the value of the property, choose a deal that doesn’t have a higher lending charge, as repayments can be expensive. A useful site to filter out these is Moneyfacts, a comparison website.

Mortgage Broker Fee

If you use a mortgage broker to arrange your mortgage, find out if there’s a fee for this service as some brokers get commission from the mortgage lender, and others will charge their customers. The fee might be up to £350 depending on where you live in the country and the service provided. A useful site to find a broker is www.impartial.co.uk .

Mortgage Booking Fee

You may have to pay a booking fee to the lender to reserve the mortgage funds. ‘This can be anywhere between £0 and £5,000,’ says Ray Boulger at mortgage broker Charcoal. ‘Although a nil fee usually results in a higher interest rate, and the higher the fee, the lower the interest rate. This fee would normally be added to the mortgage, whereas all other fees have to be paid out of savings,’ he says.

Legal Costs

To deal with the legal side of buying a property, you’ll need to hire a solicitor or licensed conveyancer. When buying a house you will pay slightly more in solicitor’s fees  compared with selling one. This is because of the additional steps a solicitor need to takes during the purchase process.

You will also need to pay a Land Registry fee (to register ownership of the property) and search fees (to check the property legally belongs to the vendor and to carry out environmental checks) as they occur, and these will be in the region of £70-£250 although some searches will be included in the home information pack (HIP) and so paid by the vendor. however, if the searches in the HIP are not more than three months old, the solicitor may say that they are acceptable but often the searches will be done again so that the purchaser and lender have them as up to date as possible. These payment will have to be paid by the purchaser.

The rest of the bill will have to be paid on completion of the deal. Fees will vary, but will be in the region of £650-£900 plus VAT for buying a £200,000 property, so get yourself some estimates. Some solicitors may agree a fixed fee or give you a written quotation, which means they can’t charge more unless they reserve the right to do so. lenders sometimes offer to pay solicitor’s fees as part of the mortgage deal.