Stamp duty, fees and surveys

Whether you are buying a home or remortgaging, we will ensure you are aware of all the related costs that are likely to arise to ensure you are in control throughout the whole transaction. Below is a list of likely charges you will need to consider depending on what type of transaction you are completing – alternatively feel free to call us and speak to a mortgage broker and advisor on (01249) 599019. The actual costs will depend on the value of your home and the deposit you have available.

If you are remortgaging:

  • Lenders application fee, booking fee, completion fee and/or arrangement fee
  • Higher lending fee
  • Survey/valuation fee
  • Conveyancing/solicitors fees
  • Early redemption penalty
  • Mortgage exit fee
  • Consultancy fee

If you are a first-time buyer:

  • Lenders application fee, booking fee, completion fee and/or arrangement fee
  • Higher lending fee
  • Survey/valuation fee
  • Consultancy fee
  • Conveyancing/solicitors fees
  • Stamp duty
  • Removals

If you are moving home:

  • Lenders application fee, booking fee, completion fee and/or arrangement fee
  • Higher lending fee
  • Survey/valuation fee
  • Early redemption penalty
  • Mortgage exit fee
  • Estate agent fees
  • Consultancy fee
  • Conveyancing/solicitors fees
  • Stamp duty
  • Removals

Lenders application, booking, completion and/or arrangement fee

It is likely you will be charged one if not more of these fees. These fees are charged depending on the specific product you choose and are either payable in advance, added to the loan or deducted from the mortgage advance on completion. It covers the administrative expenses incurred whilst processing your mortgage application.

Higher lending fee

Although these fees aren’t common in today’s mortgage market they are a fee charged to enable you to borrow against a larger percentage of your homes value. This is a premium charged by some lenders in order to indemnify themselves against any financial shortfall they may incur in the event of them selling your property following repossession. It is applicable if the amount required is higher than a percentage of your homes value, for example 85%. This fee may either be added to the mortgage or deducted from the mortgage advance on completion.

Survey/valuation fee

Whether you are buying a new property or remortgaging your existing one, the lender will undertake a valuation of the property to ensure it provides adequate security against your proposed mortgage – which will also give you confidence that the price you are paying (if buying) for your new property is correct. Depending on the mortgage product we arrange for you, the cost will either be paid for by your new lender or by you. There are three types of valuation/survey:

  • Basic valuation for mortgage purposes – this is carried out purely on behalf of the mortgage lender even though you may have to pay for it. Most lenders charge valuations fees on a scale depending on the value of the property. The report is basic and all lenders disclaim any responsibility for the condition of the property. You have no recourse against the surveyor for any defects or problems overlooked in the report.
  • Homebuyers report – this report will include a basic valuation for mortgage purposes and will contain a report on the condition of the property highlighting any defects found. It will include any suggestions as to additional specific reports you may like to have completed such as an electrics or damp and timber report. Again you have no recourse against the surveyor for any defects or problems overlooked in the report.
  • Full structural report – this report is the most thorough and expensive of the options. If the property is defective the surveyor should discover this. If major defects are not discovered then the surveyor acting for you would have some legal liability and you would be able to claim redress.

 

It is important to note that with any level of report, where there are potential or actual defects found the surveyor may suggest you obtain additional specialist reports which will be at your expense, such as an electrics or damp and timber reports. These additional reports can be time consuming. Dealing with solicitors can be the cause of delays in the process – to ensure you experience minimal delays and potential stress we can advise you on reliable, contactable and competitively priced solicitors who will provide you with good value for money and have a common sense approach to your transaction.

Early redemption penalty

This is a penalty charged on some mortgages when the loan is repaid in full within a set period (normally during a special rate period). If you are moving home this fee can sometimes be avoided if your existing mortgage is portable (meaning you can take your existing mortgage with you to you new home) – we will be able to advise you further on this matter to ensure you are not paying unnecessary fees and are receiving the appropriate advice to meet your needs.

Mortgage exit fee

This is an administration fee charged by lenders to you for repaying your mortgage in full and closing the mortgage account down.

Consultancy fee

This fee is to cover the costs involved in providing our professional service to you and is payable on completion on your mortgage. Your adviser will be able to explain this fee to you should it be payable.

Estate agents fees

These will differ by agent and are charged to you for marketing and selling your home. The cost is likely to be based on a percentage of your homes value so it is best to get a quote and find out what value the agent is going to add to you should you decide to proceed with them.

Conveyancing/solicitors fees

Conveyancing is the legal process to transfer the ownership of a property from the seller to the buyer. If you are buying a property, your solicitor generally works on behalf of your mortgage lender who will usually insist on certain searches before they will release money for your home.

Your solicitor will set a date for completion of your transaction and make sure all mortgage conditions requiring attention are complied with. They will also receive the mortgage funds from your lender and the deposit funds (if applicable) from you prior to completion which will then be forwarded to the sellers solicitor on the date of completion.

As mentioned above, dealing with some solicitors can be the cause of delays in the process – to ensure you experience minimal delays and potential stress we can advise you on reliable, contactable and competitively priced solicitors who will provide you with good value for money and have a common sense approach to your transaction.

Stamp Duty/Land Transaction Tax

When you buy your new home if you are in England or Northern Ireland, you may need to pay stamp duty which is payable via your solicitor to Her Majesty’s Revenue and Customs (HMRC). The money you’ll need to pay can be a significant number, so it’s important to plan and budget, as it can often be the second largest lump sum outlay, after your deposit.

Stamp duty normally applies to any property purchase over £125,000, unless your new home is classified as being in a disadvantaged area – where separate rules apply. However, you may be aware that from the 8th July 2020 to the 30th June 2021, a stamp duty holiday has applied. This means when you buy your new home or property up to the value of £500,000, stamp duty will not be chargeable, as long as your purchase completes by the 30th June 2021. Then, between the 1st July and the 30th September 2021, first-time buyers will pay no stamp duty on purchases up to the value of £300,000. Normal stamp duty will be payable from the 1st October 2021.The temporary rates are as follows:

 

  • Up to £500,000 = 0%
  • The  portion from £500,001 to £925,000 = 5%
  • The portion from £925,001 to £1.5m = 10%
  • The portion above £1.5m = 12%

Stamp duty on second homes

If you already own a home and are buying another property, either to rent out or use as a holiday home for example, you’ll usually have to pay 3% on top of the normal stamp duty rates. This surcharge will also apply even if the main home you currently own is overseas.

If you purchase a house for your child, and are named on the deeds of the property, whilst already owning a property, the surcharge will be payable.
If you already have a buy-to-let property, and are selling your main residence and buying a new main residence for you to live in, you will not have to pay the surcharge.

If you complete on your new property while still owning your old home you will have to pay the surcharge. However, if you sell your old home within 36 months you can reclaim the extra tax.

Land Transaction Tax

From the 1st April 2018, Wales changed the name of Stamp Duty to Land Transaction Tax.

Land Transaction Tax normally applies to any property purchase over £180,000, unless your new home is classified as being in a disadvantaged area – where separate rules apply. However, until the 30th June 2021, a Land Transaction Tax holiday has applied.

The details below show you the limits until the 30th June 2021:

  • Up to £250,000 = 0%
  • The portion from £250,001 to £400,000 = 5%
  • The  portion from £400,001 to £750,000 = 7.5%
  • The portion from £750,001 to £1.5m = 10%
  • The portion above £1.5m = 12%

When you buy a residential property in Wales and you already own one or more residential properties you may need to pay the higher residential rates:

  • Up to £180,000 = 4%
  • The portion from £180,001 to £250,000 = 7.5%
  • The portion from £250,001 to £400,000 = 9%
  • The  portion from £400,001 to £750,000 = 11.5%
  • The portion from £750,001 to £1.5m = 14%
  • The portion above £1.5m = 16%

Removal fees

These are one of the often forgotten costs of buying or selling your home. Removal fees will have to be paid if you hire a company to help move your belongings from your existing home to your new one.

What to do next to receive comprehensive mortgage advice

If you’d like to know more – call us on (01249) 599019 to speak with a mortgage advisor, or click here to send us an email to find out what your options are.