When buying a property, or switching your mortgage, it is not just your regular mortgage repayments you need to think about. There are a number of others costs involved which you should be aware of and ask your lender about. Some of these can be reduced or avoided by shopping around. They include:
- Arrangement fee– some lenders charge a fee to arrange the loan. This may be a percentage of the loan amount, such as 0.5%. Some lenders only charge this for buy-to-let and investment properties.
- Brokers’ fees– some brokers charge a fee to arrange your mortgage or for mortgage advice. This might be a percentage of the mortgage amount or a flat fee. Not all brokers charge a fee so if you are planning to use a broker it is important to ask about this and to shop around.
- Estate agent fees– if you are selling a property and using an estate agent you will have to pay a fee for this service. It is usually between 1% and 2.5% but can also be a flat rate.
- Solicitor’s fees – to look after the legal aspects of your mortgage (conveyancing) a solicitor will charge a flat fee or a percentage of the mortgage amount, typically 1% to 2%.
- Indemnity bond – this is a type of insurance policy that a lender can take out when they give you a mortgage. It insures the lender against making a loss if they repossess your property and it is worth less than the outstanding balance of the mortgage. It is usually charged as a percentage of the mortgage but many lenders waive this charge.
- Valuation fee – this is paid to a professional valuer to estimate a property’s market value and is required by the lender as part of your mortgage application. A valuation is valid for a short period of time, typically four months. You will need to get an up-to-date valuation of your property if you want to switch mortgage.
- Structural survey fee – a structural survey is done to find out the condition of a property. If any issues arose during the valuation of the property or it is very old, your lender may insist on a structural survey. Even if your lender does not require it, you may want to get a survey anyway to be sure there are no problems with the building. The amount you will pay can be dependent on the type, age and location of the property.
- Stamp duty –this is a tax payable on documents when you transfer ownership of a property. For residential property it is charged at 1% of the property value up to €1 million and 2% for anything above that.
- Local Property Tax –this tax, collected by Revenue, is charged on all residential properties and came into effect in 2013. It is a self-assessment tax and you calculate what is due based on your own assessment of the market value of your property. It can be paid in a lump sum or spread out over the year.
You should take the above into account when you are working out how much you will be able to borrow.
In accordance with the provisions of the Consumer Credit Act 1995, the following are for your attention:
Warning: Your home is at risk if you do not keep up payments on a mortgage or any other loan secured on it. The payment rates on this housing loan may be adjusted by the lender from time to time.
Note: The above notice in respect of adjustments to repayment rates will not apply during any period when the loan is at a fixed rate.
In accordance with the provision of the Consumer Protection Code (CPC) 2012 the following are for your attention:
Warning: If you do not keep up your repayments you may lose your home.
Warning: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating which may limit your ability to access credit in the future.
The following warning applies in the case of variable rate loans:
Warning: The cost of your monthly repayments may increase.
The following warning applies in the case of fixed rate loans:
Warning: You may have to pay charges if you pay off a fixed rate loan early.
The following warning applies in the case of debt consolidation loans:
Warning: This new loan may take longer to pay off than your previous loan. This means that you may pay more than if you paid over a shorter term