Mortgages Advice - Charges
Higher Lending Charge
If your mortgage represents a high percentage of the purchase price, or valuation of your property and your lender has indicated that you will have to pay a high percentage lending fee, or pays it on your behalf, they may use some or all of this fee to obtain mortgage indemnity insurance to act as extra security for their sole benefit. If this is the case, your lender will give you a written explanation, stating that:
Such insurance is not designed to cover you, the homeowner, and will not protect you if your property is subsequently taken into possession and sold for les than the amount you owe.
You will remain liable to pay all sums owing, including arrears, interest and the lenders legal fees. Interest will continue to mount up as long as the mortgage is outstanding.
The High Percentage Loan Insurer has the right to sue you for the amount paid to the lender, to cover any shortfall upon sale following a repossession.
Other Fees and Charges
Valuation Fee
Before a lender will offer you a mortgage they will require a qualified valuer to inspect the property and to submit a valuation report. This is to ensure that the property is suitable security for the loan requested. The report does not necessarily give you an indication as to the condition of the property. If the property is new and the building not completed, you have to pay an additional fee for a second valuation when the building is completed. This report is for the lender's purposes and you may not receive a copy.
Homebuyers Report
A Homebuyer's Report is more detailed, it is limited in focus and there is little comeback in the event of serious problems encountered later. It is likely that defects will be identified, giving you the opportunity to obtain any necessary reports. It is highly recommended that the valuation be arrange in conjunction with the lender to prevent duplicate valuation costs.
Full Structural Valuation
A full structural survey is a thorough and complete inspection of the property carried out by a qualified professional Surveyor. It is expensive, but nevertheless worthwhile for many mortgage applicants. It is highly recommended that the valuation be arranged in conjunction with the lender to prevent duplicate valuation costs.
Arrangement/Reservation or Booking Fee
Depending on the mortgage you obtain, some lenders may charge arrangement, reservation or booking fees. Please refer to the illustration provided.