Knowledge Base

Knowledge base explains more about expected time scales of your purchase, frequently used jargon terms and some of the important costs that you need to factor into your transaction. Use the stamp duty calculator to check how much stamp duty you must pay on a purchase.

Purchase timeline

Stamp Duty Calculator

Loan to value

This is the loan percentage compared to the value of your property to determine your interest rate.

Encumbered property

This is a property without any mortgages secured against.

Ground rent

This is a payment made to the freeholder of the land in rent. This applies to leasehold properties and on a £250,000 flat you would typically pay £200-300/annum.

Service charge

This is the payment made to the management company of a leasehold property. This typically applies to leasehold properties. This is a combined payment to cover the maintenance and insurance of the block of flats. It can cover gardening, cleaning, lighting and maintenance.

Leasehold

This is where you purchase a ‘long-lease’, typically 100+ years, normally associated with flats. If the lease was to reduce to 0 the freeholder would regain ownership of the flat. As the lease length drops close to 80 years you will likely need to consider extending the lease which can cost into the tens of thousands.

Freehold

If you purchase the freehold of a property then you own the land that the property sits on.

Agreement/Decision in principle

A credit search and affordability check done by a lender to give a good idea of the mortgage that would be available to you. This would be subject to underwriting.

Early repayment charge

If you take out a fixed rate you are normally locked in for the length of the fixed period. On a 5 year fixed rate early redemption charges could be 5% year 1, 4% year 2, 3% year 3, 2% year 4, 1% year 5.

Mortgage valuation

This is a basic valuation to determine if the value of the property is correct to the lender.

Homebuyers report

A longer report written to the buyer from the surveyor that typically uses a traffic light system (red, amber, green) to determine if there are areas within the property that may need work or further research needed.

Building survey

This is a more intrusive and expensive survey that will go into a much better level of detail if there could be any structural or expensive issues on the property. This would generally only be suggested on older/larger freehold properties.

Income multiple

Lender calculate maximum loan sizes based on affordability however they do also have an income multiple cap (typically 5.5x) as an additional limit.

Joint tenants

In association with property ownership. You would own the property 50/50 and on death your 50% would be passed to the other owner.

Tenants in common

In association with property ownership. You can own the property in uneven amounts (90/10 for example) and on death your % would be passed to your next of kin.

Land registry

This is the government directory that hold records of ownership of the property. Your ownership will be registered here by your solicitor on completion.

Offset mortgage

this is a mortgage linked to a savings account which effectively allow you to access the equity within your property. You can use money within the savings account and only pay mortgage interest on the mortgage balance minus the savings account balance.

Portability

This is when you move house and move your mortgage to a new property. This is generally done to avoid paying early redemption charges on a house move. You can usually top-up if you need to borrow more subject to normal underwriting.

Stamp duty

Use our calculator at the bottom to work out what you need to budget.

Solicitor fees

Around £1500-£2000 but varies on property value, leasehold/freehold.

Deposit

Minimum 5%. The best interest rates are available if you have 40% equity/deposit.

Lender product fee

Typically around £999 but can be added to the loan.

Broker fee

Lenders usually pay a percentage of the loan amount to the broker on completion, however some brokers charge a fee on top depending on the complexity. A typical fee is £500.

Valuation fee

Most ‘valuations’ are free for mortgage purposes. You can also opt for a ‘Homebuyers report’ or ‘Building survey’. On a £500,000 property a typical Homebuyers report cost would be around £500-600.

Removal costs

Typically £300-£600.

Estate agent fee

This is only paid by a seller, not a buyer. If you are selling, you typically pay 1-2% for an agent to sell your property (plus VAT).

Stamp Duty Calculator

Use our Calculator to work out your stamp duty payment due at the end of your purchase.

When is Stamp Duty paid?

When buying a property over a certain price, stamp duty is payable to the HMRC 30 days from the date of completion or you may risk a fine. Your solicitor or legal adviser should take care of this for you and ensure you don’t miss the deadline. Some buyers prefer to add on the SDLT amount to their mortgage loan. Please speak to your mortgage provider.

IMPORTANT INFORMATION

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP
REPAYMENTS ON YOUR MORTGAGE.

Registered in England and Wales

 

 

Monopoly Mortgages Ltd is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited. Advance Mortgage Funding Limited is authorised and regulated by the Financial Conduct Authority.

​The guidance contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK​

Registered office address – Alpha House, 100 Borough High Street, London, England, SE1 1LB
Registration number – 11987893

​There may be occasions when we need to charge a fee, however, this will be dependant upon your circumstances and we would let you know how much this is likely to be when we make our initial disclosures to you at the outset. The fee can range from £99-£499.

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