Your home may be repossessed if you do not keep up repayments on your mortgage.

Fees and costs

As a home buyer there will be a couple of fees to pay when taking out your mortgage. It’s always best to understand them and to try and work out how much they will cost you upfront, so you can then set the payments aside.

Mortgage fees

Early repayment charges and exit fees

If you already have a mortgage in place then your current lender may charge you to leave your deal if you are still in the special rate period (i.e. the fixed or tracker rate period). This is typically known as an early repayment charge (ERC).

There is also usually some sort of exit fee charged to cover the cost of the administration work required to close your mortgage down, and this may also be applied when the special rate period is over.

Product fee

When you take out a mortgage there may be a fee to pay to cover the cost of arranging your deal. This is often referred to as a product fee and it forms part of the terms and conditions of your mortgage deal. With Northern Rock mortgages, you can add the product fee to your loan on completion.

Product fees may vary depending on the product, and some products don’t carry a product fee. These are referred to as ‘fee free’ or ‘fee saver’ products, however they tend to come with higher rates.

Application fee

An application fee is typically a non-refundable fee charged when you take out a mortgage. With Northern Rock, all mortgage applications are subject to a non-refundable £99 application fee which is payable upfront.

Surveyor and valuation costs

Before you formally agree to buy your new home you need to make sure it is a sound investment, so you’ll need to arrange to have your property valued. There are three main reports to choose from: a Mortgage Valuation Report, a Homebuyers' Survey and Valuation and a Building Survey, which is formerly known as a Structural Survey.

Mortgage valuation report

Most lenders require a Mortgage Valuation Report on your new property which is carried out by a valuer employed by the lender, or an independent panel valuer. You'll receive a copy of this report, but its main purpose is to help the lender to assess the property as security for your mortgage. It's based on a limited inspection and certain defects in the property won't necessarily be revealed.

For your own peace of mind you’re advised to obtain a HomeBuyer Report or Buildings Survey which are more detailed surveys. Below is our valuation fee scale:

Purchase Price	Valuation Report Fee	Homebuyers' Fee
up to £60,000	£112	£270
£60,001 - £100,000	£132	£311
£100,001 - £150,000	£163	£352
£150,001 - £200,000	£188	£398
£200,001 - £250,000	£214	£444
£250,001 - £500,000	£275	£510
£500,001 - £750,000	£331	£561
£750,001 - £1,000,000	£377	£612
£1,000,001 - £1,500,000	£510	£817
£1,500,001 - £2,000,000	£663	£1,021
£2,000,001 - £2,500,000	£817	£1,225
£2,500,001 - £3,000,000	£970	£1,531
Over £3,000,000	By Negotiation	By Negotiation

HomeBuyer Report

This report is approved by the Royal Institution of Chartered Surveyors (RICS) and includes the following:

• information on the state of repair and condition of the property
• a valuation
• it highlights parts of the property needing urgent attention
• it will advise of any ongoing repairs and maintenance that may affect the value of the property

For this report you’ll need to agree separate Terms and Conditions with the valuer/surveyor preparing the report.

Building Survey

This is the most detailed survey report and includes an investigation and assessment of the construction and condition of a property. It will not normally include advice on value or a valuation, therefore we will still require a Mortgage Valuation Report in all cases.

For this report you’ll need to agree separate Terms and Conditions with the valuer/surveyor preparing the report and the cost of the survey will be subject to specific agreement between you and the surveyor.

Whatever survey type you ask for, we’ll advise you to speak to the surveyor first and find out what each one involves both in terms of cost and the checks carried out.

Legal costs

When you buy a home, you will need to pay a solicitor or qualified conveyancer for the legal work required. This will include checking the title to the property, preparing the mortgage documents, receiving the money to pay for the purchase, paying it to the seller's solicitor, and negotiating with the seller's solicitor in the event of any dispute.

If you are also selling a property then you may want to consider using the same solicitor for both transactions. Carrying out both transactions together mean that the sale and purchase can be easier to co-ordinate and you may be offered a package price for both. If you need help finding a solicitor, we’ll be happy to recommend one from our panel.

Estate agency costs

If you are selling your home, then it's likely that you will do so with the help of an estate agent. Estate agents advertise and can potentially show prospective buyers around your property. Typically, fees will be between 1% and 2% of the value of your home, often depending on the location of the property. Alternatively, some estate agents may charge a flat fee.

Stamp duty

Stamp duty is a tax charged by Her Majesty's Revenue and Customs on certain house and land purchases and some transfers of property. Current stamp duty rates and thresholds, correct as at 1 January 2010:

• Up to £125,000 - 0%
• £125,001 to £125,000 - 1%
• £250,001 to £500,000 - 3%
• £500,001 to £999,999 - 4%
• £1 million and over - 5%

There are some areas of the country where different rates and thresholds for stamp duty apply. For further information, please call the HMRC stamp taxes helpline on 0845 603 0135 or visit them at http://www.hmrc.gov.uk/sdlt

Insurance

You will need to consider whether your property needs buildings insurance. All mortgage lenders need to know that property is suitably insured, but your property may already be covered by a management company of the freeholder if it's leasehold. Your solicitor should be able to confirm whether this is the case. It’s also likely that you’ll need contents insurance to cover any fixtures, fittings and valuables in your property.

If you already have insurance policies in place then premiums for your buildings, contents and car insurances may go up or down if you move to a different area so your provider should inform you when you switch.

Working with our trusted partners we offer a range of insurance deals including buildings and contents, home emergency cover and life insurance. Take a look at our insurance section for further details.

Bills in your new home

Once you’re into your new home there will be ongoing bills to pay which you should factor into your future outgoings as early as possible.

These include:

Council Tax

It’s worth checking this for your new area before you move:

Direct gov home and community

Utility bills

Don't forget to do your homework on utility providers, e.g. gas, electric, water, TV subscription, Internet. There are lots of comparison websites that will help you to spot the best deals.

TV licence

You’ll also need to make sure your TV licence is set up in your new home:

www.tvlicensing.co.uk

Mail

Finally, don’t forget to redirect your mail so anything you need to receive gets to you. Royal Mail offers redirection services:

www.royalmail.com