Moving Home
When buying a new home there has never been more competition and choice available in the mortgage market. However, this choice has brought added complexity in terms of the types of products which are now on offer. This page contains a summary of some important information you should be aware of when moving home, or buying your first home. For full details and expert advice please contact us on 0845 602 5541 or complete our online enquiry form.
Higher Lending Charge - this is a fee charged by the lender where you are looking to borrow a high percentage of the property value. Most lenders will charge these where you want to borrow anything more than 90% of the property value. It protects the lender should your loan go into arrears and they, eventually have to sell the property at a loss. These fees can be high and it is important that you fully understand the cost before signing up to any deal. Some lenders however will allow you to borrow up to 95% of the property value without these fees. Our team can give expert advice on the benefits and drawbacks of mortgages with this type of fee.
Property Valuations - a basic valuation is simply that. A basic report on the property to give the mortgage lender the comfort that it forms suitable security for them to lend against. It is your responsibility as to whether you rely on this when deciding to buy a property but you have the option to have more detailed surveys carried out before you commit to buying. If you wish you can ask for a Homebuyers Report which is more detailed and will give you much more information about the property you are buying. They are generally more expensive than the basic valuation and you will usually have to pay for this. The third option is a full structural survey, which is the most detailed type of inspection a Chartered Surveyor can carry out. Again this will be more expensive but you should consider it if there are any doubts about the structure of the property you are buying and it may be money well spent in the long term.
Depending on the type of valuation required, some lenders will cover part or all of the the cost. This often depends on the value of the property being surveyed.
Stamp Duty - when buying a property over a certain value you will require to pay stamp duty to the Inland Revenue. This will be collected by your solicitor at the time of purchase and passed on by them. The bandings are:
- Properties up to £125,000 - 0%
- Properties above £125,000 and up to £250,000 - 1% of purchase price
- Properties above £250,000 and up to £500,000 - 3% of purchase price
- Properties above £500,000 - 4% of purchase price
Home Information Packs (HIP) - properties marketed for sale from 14th December 2007 in England and Wales will require a Home Information Pack, which includes a home energy rating. This now brings all properties under the HIP legislation whereas previously it had only applied to properties with 3 or more bedrooms. The purpose of the pack is to speed up the buying and selling process and should help sellers identify early any potential issues they may have with selling the property. For buyers it should allow a more informed decision when looking for a new property. In the pack there is a certain amount of compulsory information and voluntary information which may be contained. Full details can be found at www.homeinformationpacks.gov.uk.
Mortgage types, rates and fees - for information on different mortgage types and fees please go to our mortgage section
