The following fees may be charged by your lender:
- Higher lending charge
When a mortgage exceeds a certain percentage of the value of the property – usually 90 per cent although it could be higher – you may be required to pay a one-off fee.
This is the HLC and it covers the lender if you default on your mortgage.
The fee varies from lender to lender but can add up to many thousands of pounds. The fee is normally paid on completion, although in some cases it can be added to your mortgage.
- Valuation fee
The lender will instruct a surveyor to ensure your property represents adequate security for the mortgage you want – and in most cases it will send you the bill.
The cost will depend on the value of your property, and is likely to be upwards of £200.
A Homebuyer’s Report, which will give you a guide to any problems there might be with your chosen property, usually costs upwards of £400.
You may be able to cut costs by having your valuation and Homebuyer’s Report done at the same time, or by choosing a mortgage that comes with a free valuation.
- Administration/booking/arrangement/completion fees. Your chosen lender may charge any combination of these fees.
Administration and booking fees tend to be charged upfront, when you first apply for the mortgage. They are usually somewhere between £100 and £400 each, but can be higher.
Some lenders only charge a booking fee on fixed-rate deals, others will charge one whatever deal you take. Administration charges can be attached to any type of loan.
Other fees are usually payable on completion and there is often the option to add them to the loan. These can also be several hundred pounds each.
There are other costs to consider including paying for a survey and legal costs.
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