Going self employed bank fees seem huge

gehngus_2

Hi all.
After a long stint of cutbacks etc and presently being part time i have now decided to go self employed. My part time wage will not cover the amount i need for re-mortgage.

I am purchasing a shop premises but getting the business for free, this is due to the changes in post office structure. Now it is classed as a new business with postal services income/salary from the post office etc.
It all stacks up and i have now jumped through all the hoops required to take it on.

Now comes the writing cheques for the bank to do valuations on the properties.

Why are they so expensive?

Currently my house is worth approx £220k with outstanding mortgage 38k.
The shop is £75k which is the amount i want to loan.
This gives me 250k collateral.

The bank have to do their own valuations. I give them a cheque and they pay a third party.

The cost of having my own house valued is £470
The cost of having the shop premises (building only) is £770
in addition £150 per premises security fee?

This is a lot of money to fork out, what on earth do they do to justify such an amount?

This doesn't include the setup fees which includes commission to the agent that introduced us.

I would feel better if someone could let me know this is normal and just a bitter pill to swallow, its a lot of money when your trying to get started.

thanks in advance
Steve

DevCoder

Does those fees include credit facility fees, documentation fees etc?

antrobus

gehngus wrote: »

....I would feel better if someone could let me know this is normal and just a bitter pill to swallow, its a lot of money when your trying to get started....

If you are borrowing money from a bank (or anyone for that matter) and are offering some property as a collateral, it would be absolutely 100% normal to be obliged to pay for;

(1) a valuation of the property,
(2) the cost of registering the charge against the property at the Land Registry

gehngus_2

krisdorey wrote: »

Does those fees include credit facility fees, documentation fees etc?

it doesn't say.
However setup fees for the loan are some £2800 which are to be included in the load taking it to 78k. this doesn't include valuations.

I do realise i have to pay for the Valuation, just cant see how they can justify 10 days wages for one property. but If this is normal, no problem i will write the cheques out.

though it best to check first.

many thanks. i get it sorted on Monday.

[Deleted User]

gehngus wrote: »

Hi all.
After a long stint of cutbacks etc and presently being part time i have now decided to go self employed. My part time wage will not cover the amount i need for re-mortgage.

I am purchasing a shop premises but getting the business for free, this is due to the changes in post office structure. Now it is classed as a new business with postal services income/salary from the post office etc.
It all stacks up and i have now jumped through all the hoops required to take it on.

Now comes the writing cheques for the bank to do valuations on the properties.

Why are they so expensive?

Currently my house is worth approx £220k with outstanding mortgage 38k.
The shop is £75k which is the amount i want to loan.
This gives me 250k collateral.

The bank have to do their own valuations. I give them a cheque and they pay a third party.

The cost of having my own house valued is £470
The cost of having the shop premises (building only) is £770
in addition £150 per premises security fee?

This is a lot of money to fork out, what on earth do they do to justify such an amount?

This doesn't include the setup fees which includes commission to the agent that introduced us.

I would feel better if someone could let me know this is normal and just a bitter pill to swallow, its a lot of money when your trying to get started.

thanks in advance
Steve

We've recently had a valuation on a house valued between £200k and £250k. Barclays/Woolwich charged us £355

Maybe shop around, but getting the best mortgage deal probably far outweighs the odd £100 here or there on a valuation fee.
(Look out for admin fees though! They can be £2k or more, :eek: with some lenders and what for? That certainly needs to be taken into consideration when arranging a mortgage/re-mortgage)


ETA: I'm not sure I understand your figures
You currently have a house that is worth £220k with £38k mortgaged
That means you have £182k equity.

You want to borrow a further £75k to buy a shop. If I understand you correctly, that is what the shop will cost to buy.
So I'm not sure how buying a shop using borrowed money increases your equity from £182k to £250k

Also if you are paying for the shop using money released from your house, then why do you need to pay a lender anything at all to value the shop? The lender is not lending against the shop; they are lending against your house.
(Getting your own survey on the property you want to buy would be advisable though, but you can shop around for that)

gehngus_2

[QUOTE=
Also if you are paying for the shop using money released from your house, then why do you need to pay a lender anything at all to value the shop? [/QUOTE]

Don't know?
But, yes, i would have assumed the value of the house alone would cover it?

The loan for the shop is for bricks and mortar only. not paying for going concern.

Id assumed once this was added to the mix it became part of the collateral. i.e building total value £295K+. Combined mortgage amounts loan amount £113k.
Im probably confused about this.

But it does seem to be the best deal overall so Ill get down there and get the ball rolling.

Many thanks