Archive for April, 2010
If you are about to buy a house you may well be aware of conveyancing fees. When you have had an offer accepted, you’ve seen the Home Information Pack (HIP) and you’re set to go, you will still need to have conveyancing carried out. Conveyancing is the legal process to transfer the ownershp of a property from the seller to the buyer. It is usual for people to hire a solicitor for their conveyancing. If you are buying a property, your solicitor generally works on behalf of your mortgage lender, who usually insists on certain searches before they will release the money for your house. The fees can range from £200 up to £1000 depending on the solicitor.
If you are looking to secure your future after you have retired you may worry about what pensions are available to you. If you work for a large company or you work in the public sector such as the NHS or Her Majesty’s services then pensions are pretty much standard, and your employer will often contribute towards the amount. However there are many private pensions out there through independent financial advisors. You can speak face to face with advisors and work out the best plan for you. More often than not you can change your monthly investment and make it more or less to suit you.
There are so many fees to consider when you are arranging a mortgage on a property. Firstly there is the Mortgage arrangement fee. These vary enormously but usually cost £500 – £1,500. In some cases this is non-refundable, even if the house purchase falls through. There is also a valuation fee for a survey. This is to check that the property exists and it offers the lender sufficient security for the loan. This usually costs around £250.
Legal fees cost around a couple of hundred pounds but if you have to pay for your conveyancing, you’re looking at around £500 – £750. Finally there is Stamp duty which won’t be included even if your lender will cover legal fees. The strange thing here is the stamp duty tax rate is set at an absolute rather than marginal level. In simple terms – rather than you paying 4% stamp duty on everything above £250,000 you pay 4% on the whole amount.
Buying a house involves a mortgage for most people. I have already discussed mortgages and explained that there are two types to consider. There are many financial aspects to take into account when buying a house and it is important to do a monthly budget to see what you can afford and what your main outgoings will be. For example these things may need to be considered: Council Tax, legal fees, water rates, gas and electricity, the mortgage repayments, extra bills like mobile phone/landline costs, internet rates and much more. It is a large commitment and not just the mortgage repayments need to be taken into consideration.
At the moment there are to types of mortgages to choose from with most lenders. You can choose a fixed rate or a variable “tracker” mortgage. The advantage of the fixed rate is that it always remains the same on your repayments. So the interest rate that you pay back to will remain the same over a period of time, usually 2-3 or often 5 year terms.
The tracker mortgage is so called due to the fact it tracks and mimicks the Bank of England rates in which to charge interest. So one month the repayments could be really low and then the next the rates could have risen a lot. Personally I have found that lenders recommend the fixed rate mortgage but it remains to be seen how the Bank of England changes. At the moment we are on an all time low but this will only rise up.
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