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Mortgages, True Costs Revealed – Survey, Valuation & Legal Fee’s

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Author: Liam G

There are three levels of assessment that can be carried out on your property; a ‘basic’ valuation, a home-buyers report and a full structural survey. The latter two are prepared for the client whilst the first is for the Lender although often the applicant receives a copy.

All lenders need a “basic survey” to ensure that the property they are providing a mortgage for is of sound quality, with no obvious structural defects.

Some lenders offer this free of charge. However, most do not, in which case you can expect to pay around £300.

The second option is a “homebuyers report” which gives a more detailed assessment of the superficial condition of the property and costs around £500

The most comprehensive assessment is a “full structural survey”. This is a far more detailed version of the basic survey, which will usually uncover defects which are not immediately obvious. It is recommended for older properties.

Such surveys are far more costly and you can sometimes expect to pay over £1000. However, if any problems are found with the property, then buyers will be in a good position to negotiate a discount, and thus get a cheaper mortgage. In addition, it ensures you are aware of all defects before committing to a purchase that could have been a very expensive mistake.

Either a homebuyers report, or a full structural survey are useful to have done if you are buying a property for the first time.

For many people who are re-mortgaging their property, a “mortgage valuation” will ensure that the amount they are lending is relative to the property being mortgaged.

You can expect to pay upwards of £150, depending on the size and purchase price of the property.

As with other surveys, some lenders will offer this service free of charge. It is also common practice for when obtaining a homebuyers report or full structural survey that they are bundled together with the Lenders valuation – and the fee for the ‘homebuyers’ survey of full structural survey covers both reports..

Conveyancing is the term given to all of the legal work involved with purchasing a home, the costs of which varies considerably from £400 to £1,500.

The exact cost will depend on the solicitor used, the area, the value of the house and the work involved. Conveyancing is often a slow process, as the solicitor has quite a lot of work to do.

In most cases the overall fee will be made up of:

  • Local authority search fees
  • Environmental and drainage search fees
  • Land Registry fee
  • Telegraphic transfer fee
  • Solicitors’ administration costs
  • Stamp duty (currently for properties over £120,000)

It is worth noting that some of the searches that used to be carried out by solicitors on buyers’ behalf are now part of the Home Information Packs (HIPs) that sellers must provide would-be buyers before a purchase goes through.

An easy way to save on legal costs is to use a licensed conveyancer instead of a solicitor. Although they are often harder to find, the work they do is often of no less quality than a solicitor. With both though, it pays to check out their credentials and for extra peace of mind, get one through personal recommendation.

You also need to check that your legal representative is acceptable to the Lender. Most Lenders have restrictions and will not accept every firm to carry out the conveyance on their behalf.

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About the Author:

Liam G is a UK based financial author, currently focusing on mortgages, in particular the hidden costs associated with taking out a mortgage.