Fees and charges

In addition to the purchase of the property, there are a range of additional fees which you may be liable to pay. These include:

• Lenders’ Arrangement Fees
  
• Mortgage Indemnity Premiums
  
• Brokers’ Fees
  
• Survey or Valuation Fees
  
• Homebuyers Survey or Structural Survey
  
• Land Registry Fee
  
• Stamp Duty Land Tax
  
• Early repayment charges

Lenders’ Arrangement Fees
Charging arrangement fees has become a common practise in recent years. They can range from several hundred to several thousand pounds. The arrangement fee is charged by your lender and may be payable upfront or as part of the loan itself. In addition, lenders who decline applications may refuse to return arrangement fees. This is why it is important to check what terms and conditions apply before agreeing to any payment contract.
Mortgage Indemnity Premiums
Mortgage Indemnity Premiums or Higher Lending Charges as they are often called, are payments which are made to the lender to protect them in the event that you are unable to pay your mortgage. The Premiums are used to purchase insurance so that if your property has to be repossessed and sold, the lender won’t make a loss. How large the premium is depends upon the lender and how large your mortgage is. For mortgages of 100%, premiums may be as high as several thousand pounds. For smaller mortgages of around 80% of the property price, premiums are generally lower, at around one or two hundred pounds. It is possible to avoid these premiums as an increasing number of lenders pay the premium themselves now. Mortgages which are worth less than 75% do not usually have premiums.
Brokers Fees
The fee brokers charge can be offset against how much they earn from your custom with the lender. They are obliged by law to disclose any fees that they are receiving. This includes how much commission they earn on the sale of a policy and any other payments that they may receive from the lender. When you know these costs you can ask the broker to offset them with the fee they are charging you. In addition, if you are asked to pay fees up front, find out if they are refundable in the event that the broker is unable to secure a deal for you.
Broker fees are normally around one 1% of the mortgage cost.
Survey or Valuation Fees
Before getting a mortgage, the property needs to be valuated. This valuation shows the mortgage lender the worth of the property and helps them calculate the value of the  mortgage. Valuation fees usually have to be paid at the start, but it is becoming common for lenders to refund fees when the mortgage policy has been completed.
Homebuyers or Structural Survey
While this form of survey is not obligatory, it is strongly recommended. An independent surveyor will thoroughly assess a property for defects, which may or may not get picked up by a valuation survey. Things which are not visible, such as electricity and heating systems as well as structural weaknesses can all be checked by one of these surveys.
Land Registry Fee
To register ownership for a piece of land you must pay a land registry fee.
Stamp Duty Land Tax
This tax is payable on some properties. Properties which are worth over ₤60,000 are charged at 1 % stamp duty land tax. Properties over ₤250,000 are charged 3 % and properties over ₤500,000 are charged 4 %.
Early Repayment Charges
These are penalties charged when a borrower pays their mortgage off before the end of the agreed upon redemption period. Such penalties often apply with fixed, capped or discounted rate mortgages. Redemption penalties can be costly. This is why it is important to read terms and conditions of mortgage agreements carefully before signing.