Fees and Expenses

ORKNEY IFA FEES

Click here for our Initial Disclosure Document and Terms of Business

For a straightforward residential mortgage or remortgage, Orkney IFA receives a commission from the lender. We generally charge a fee of £250 for mortgage advice - the amount will depend on your circumstances and the complexity of the transaction. For more complicated cases, or where for some reason a good deal of additional work needs to be done, we may need to agree a higher fee with you. If we do all the work and your mortgage doesn't go ahead for any reason we reserve the right to invoice you for the amount of the commission. If you take and maintain your life insurance through our agency we will waive the mortgage advice fee.

Because we're independent we must also give you the opportunity to pay, if you wish, a fixed fee for our services in which case we'll pay any commission we receive to you . This means you can be sure that we didn't place your mortgage with a particular lender because their commission terms were better for us.

We don’t charge for advice about mortgage protection insurance, or mortgage payment protection insurance.

CHARGES MADE BY LENDERS

Where a fee is shown with an asterisk * , the fee can usually be added to the loan – but you should keep in mind that if you do, it’ll increase the amount of the loan and so the amount of interest you pay.

*Arrangement Fee / Booking Fee
It’s usual now for mortgages to have some sort of arrangement or booking fee, which may be payable on application, or may be payable when the loan is drawn down.  It may be refundable if the mortgage doesn’t go ahead, or it may not.  Generally, it’s the case that the bigger the fee, the lower the interest rate; Orkney IFA will look at all the different combinations of fees and calculate whether it’s worth you paying a fee to save on your interest rate.  Fees might be a fixed amount, or might be a percentage of the loan.  The best value for money may not be simply the lowest interest rate! 

*Valuation Fee
Lenders usually charge for the Valuation to be done and prefer to instruct Valuations themselves so the Valuer is working for them, and not you.  The fee usually depends on the value of the house you’re buying.  Valuation fees are generally payable on application.

*Higher Lending Charge (HLC)
If the Loan to Value (the ratio between what the house is worth and what you're borrowing) is high, lenders may charge an HLC.  It’s like an insurance premium and is a percentage of the loan amount – it’s paid by the lender to an insurance company so that if the house has to be sold and the lender loses money, the lender can reclaim losses from the insurer.  But…. If that happens, the insurer is entitled to recover the losses from you.  HLCs are always worth avoiding if possible as they’re expensive and provide no protection to you – only to the lender.  Orkney IFA can find lenders who don’t charge HLCs.

Telegraphic Transfer Fee
A small fee usually deducted from the mortgage advance when it’s paid out to pay bank charges for sending the funds electronically to your lawyer.

Early Repayment Charges
Made where you repay the loan in full, or perhaps repay part of it, during the time when the mortgage is on a Fixed Rate or other special product.  ERCs can be typically 3% - 6% of the amount you’re repaying.  By understanding your needs and your circumstances, Orkney IFA will help you avoid fees such as ERCs, and if, say, you unexpectedly came into money while your mortgage was liable for an ERC, we’d help you decide whether it would be worth suffering the charge, or holding money back until the special product expired.

Mortgage Administration Fee
This is usually a fee charged if you repay your mortgage to go to another lender, or repay it in full, before the scheduled end date of your mortgage is reached.  Typically, it’s £90 - £250, depending on the lender.

CHARGES MADE BY LAWYERS

You should negotiate a maximum fee with your lawyer or solicitor, which will include “statutory disbursements” (which the lawyer has to pay to register the mortgage) and VAT.  We have an association with a law practice in Aberdeen which offers an extremely high quality service at very reasonable rates, and can get a quotation for you.

OTHER CHARGES

Supervision fee
Again this relates to new build or self build projects where your builder isn’t NHBC registered.  The supervisor cannot be the same person as the Valuer, and will charge for certifying the build quality.  Likely minimum cost is several hundred pounds.

Planning and Building Warrant fees
These would be charged by the Local Authority if you’re building a new house.  The fees are on a scale published by the Council; the Planning Department will be able to help you.

Stamp Duty
A tax levied by the Government on qualifying property transactions, payable to your lawyer at the time of completing the purchase.

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