The Costs of Arranging the Mortgage - Optimum Finance Group Limited

When you apply for a mortgage and buy your home, you will have to pay various costs. These will include:

Stamp Duty

Stamp Duty is a government-imposed tax on the buying of property in the UK (does not apply to remortgages)

There are exemptions for the purchase of property in “disadvantaged areas”.

Valuation Fee

The lender will ask you to pay a fee for a surveyor to value your chosen property. This is normally up front when you apply for the mortgage.

Arrangement Fee

Charged by the lender for setting up the loan, either paid on completion of the mortgage, or added to the loan, depending on the lender.

Booking Fee

Charged by the lender to secure the mortgage funds, payable at the time the mortgage is submitted. A booking fee normally only applies to fixed or capped rates, but not all lenders will charge it.

Legal Fees

Solicitor’s fees or conveyancing fees. This is charged by the solicitor or licensed conveyancer acting on your behalf. They will also pass on to you the cost of the land registry charges, and the search fees.

Optimum can provide quotes for legal fees for over 100 law firms throughout the UK.

Telegraphic Transfer Fee

Charged by the lender for transferring the mortgage funds to your solicitor for completion.

Higher Lending Charge

Also known as Mortgage Indemnity Guarantee

You are likely to come across this charge if you borrow more than 75% of the value of your home. This covers the lender against any loss on selling your property if you fail to keep up the mortgage payments. You normally have the choice of paying the fee when the mortgage completes, or adding the fee to the loan. Many people add the fee to the mortgage, as they cannot afford to pay for it in one go. The cost can sometimes run into thousands of pounds. Of course, adding the charge to the loan will mean that you will also get charged interest. Many lenders will waive the higher lending charge fee – speak to Optimum who can advise you on how to avoid paying a higher lending charge.

Broker Fee

Charged by a mortgage advisor for their professional duties in arranging the loan and guiding you through the process of the purchase or remortgage.

A fee of up to a maximum of £500 or 1% of the loan amount for a standard mortgage.  Typically this will be £195.

At the end of your mortgage…

When you finish your mortgage, or switch to another lender, you may be liable for the following fees…

Deeds Release Fee

Fee charged by lender for releasing its charge over the deeds of the mortgaged property and returning them to the client or their solicitor

Mortgage discharge

A fee charged by the lender to release its charge over a property following the repayment of a mortgage.