Valuation cost 390pounds!

househelp_2

Hello Everyone,

I need some opinions please. I am buying a house at the moment and am a bit shocked by all the extra fees. I actually just found today about most of them!
The fee for the mortgage will be 600pounds.
Then they told me the valuation would be 390pounds.

Well it arrived today and I could have done a better job myself! It is a 2 page letter which basically tells me that the house is made of bricks and has tiles on the roof along with the purchase price and one or two other things. And all over it is written that they haven't actually done a proper survey and my conveyor will tell me more. What does this mean? I have to have a separate survey done too? Altogether the extra charges come to nearly 4K, (including stamp duty) which I hadn't budgeted for. The solicitor is charging over 500pounds, but all the extra charges are on top like search fees etc. (plus extra survey fees)

Shall i just shut up and cough up (means borrowing money from my dad)?


Thanks

Woby_Tide

Fair enough fees can come as a shock but most are standard i.e searches/stamp duty. As for mortgage arrangement fee and valuatiuon fee, just one of lifes little games to explain why the cheapest rate on paper is often not as good as it looks, should have all been on paper for you to check before you agreed.

househelp_2

Hi, thanks for the reply. :j

But I still don't know why they have to be so high! For the five minutes he spent looking at the house, I paid through the nose! Also the solicitor, they say that they will charge extra for all the searches and for every phone call and letter, so what is the inital 500pounds for?

It just seems a bt much that's all

jjuggle

The initial monies are for the solicitor to carry out searches on the property. £500 is on the steep side, I've paid £250 recently but it will be deducted from your final bill. As for the survey, £390 sounds like it would be a Homebuyers report which is a step up from the very basic survey which cost us £170. Who suggested and arranged this for you? The Homebuyers report is a usually recommended as a good idea if you are buying an old property Victorian, Edwardian etc.

Ian_W

Househelp,
Love your description of the survey - totally f***ing true. :rotfl:
Only good thing is if you'd had a full structural survey it would have cost you + £1k and they'd still be telling you to have someone else check this, that & t'other.

Afraid all these fees are part & parcel. Solicitors fees do seem a bit steep, probably too late to tell you to get quotes from others - but you'll know for next time.

Anyway congratulations on buying your new house.

Doozergirl

Mortgage companies normally charge valuation & arrangement fees - to reiterate what Woby_Tide has said.

You have not paid for a full survey, or a homebuyers report though. The mortgage company's surveyor has simply checked that the house is mortgagable (that there are no major faults). How old is the house? It's the age that would determine whether you should pay for a seperate survey. If he hasn't pointed anything out as maybe looking at further,you may not need a survey - depends on how cautious you want to be.

MarkyMarkD

jjuggle wrote:

The initial monies are for the solicitor to carry out searches on the property. £500 is on the steep side, I've paid £250 recently but it will be deducted from your final bill. As for the survey, £390 sounds like it would be a Homebuyers report which is a step up from the very basic survey which cost us £170. Who suggested and arranged this for you? The Homebuyers report is a usually recommended as a good idea if you are buying an old property Victorian, Edwardian etc.

It probably was NOT for a homebuyers' report - £390 is a completely normal amount for a basic valuation, depending on the value of the property.

All of the costs you've mentioned would have been included in the statutory KFI document, which you should have received from your lender or mortgage intermediary.

welnik

"All of the costs you've mentioned would have been included in the statutory KFI document, which you should have received from your lender or mortgage intermediary"

Absolutely, the KFI (Key Facts Illustration) should be issued by either the lender or the broker/financial adviser and it will detail exactly what charges are involved. If you have sorted it out via a broker, you will see how much he is getting from the lender and how much he is charging you. I am guessing that you are

Below are some of the costs associated with a mortgage application that you should have been made fully aware of:

Application fee
An administration/arrangement charge payable upon application. This fee is non-refundable and may vary between products.

Valuation fee
You will be required to pay for a report to establish the value of the property. Bear in mind that although you are paying for this, it is really for the lender's information only. However, you pay for it. Some lenders dont even issue a copy to you.

CHAPS
It is common practice to send the mortgage advance to your conveyancer by CHAPS, and the charge is usually £25

Completion fee
This covers the work in the setting up of the mortgage - when the money to buy your new home is released to the seller This fee is product specific, and may vary between products.

Conveyancing costs

The costs your conveyancer deals with on a purchase, which you will be required to pay, include:

Stamp Duty Land Tax: a tiered government tax on the price you pay for your home on properties starting at a value of £120,000
search costs - the cost for carrying out searches on your behalf such as with the Local Authority and Land Registry.
Your conveyancer will also charge you for the work they carry out such as:

dealing with enquiries
drafting contract for sale/reviewing contract on purchase
confirming legal boundaries
arranging completion/preparing the document which transfers legal ownership.
Full details of individual charges which apply to your loan will be included in your Key Facts Illustration (KFI).

Obtain a tariff of charges from the lender.

This is what my mortgage lender would charge for a valuation:-

Up to £50,000 £160
£50,001 - £100,000 £195
£100,001 - £150,000 £220
£150,001 - £200,000 £250
£200,001 - £250,000 £290
£250,001 - £300,000 £325
£300,001 - £350,000 £365

Hope this helps

MarkyMarkD

Excellent detailed explanation, welnik - thanks!

Nobody should get to the stage of receiving their valuation report before knowing about the full costs involved in the house buying process. If your intermediary (and I'm assuming a lender wouldn't have failed to provide a KFI) hasn't done this, they are in serious breach of professional standards and they want a slap!

househelp_2

Thank you for such helpful and detailed replies. The house is 20 years old.
I did get all the documents and knew how much I had to pay, but it has all happened so quickly! I spoke to the mrtgage advisor on Monday, got a call from the valuer on Monday afternoon and a copy of the report on Wednesday morning. It's just that I expected a bit more for my money. This is verbatim what the report says:
3 bed semi,
private residential area
20years old
Brick
Tile
Mains services
Then value,
address
the property is acceptable.
freehold

He doesn't even need to have gone inside the house for this. Well, it just seems like a lot of money. When you set out to buya house, you just feel like the numbers are so large!

MarkyMarkD

The valuation is entirely for the lender's benefit. They don't even need to give you a copy of it, although some do. All they care about is that the property is adequate security for the loan.

Quite likely they won't even go inside the house. Some lenders won't even bother visiting the property at all - particularly if it's a remortgage and you are not borrowing too high a percentage.

When we remortgaged recently, they certainly didn't come in the house and I doubt they even did a "drive by". We were borrowing under 75% so the risk to them is negligible.