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The table below
suggests the expenses that are faced when moving home, it is intended only
as an 'aide memoire' and may not be exhaustive. Simply click on the
subject in the table to find further explanation if required.
The
Cost of the Mortgage
The initial cost will be
subject to the
following in all cases:
*the
lender's valuation fees
*the
lender's legal fees
*your
own legal fees
In
addition, these further fees may be incurred:
*the
cost of advisers or brokers (which may be indirect)
*the
mortgage indemnity policy (often required if your loan is a
very high percentage of the price
of the property, see below)
*the
mortgage protection insurance (policies to
ensure that your mortgage continues to be paid for a limited period
if you fall on hard times, or paid
off in full if you die)
Mortgage
Indemnity Policy
 Reputed
to be one of the mortgage industry's best kept secrets (and sometimes
called different names) don't be caught out wondering what this extra
expense is and who benefits from it.
The lenders take out this insurance to cover themselves against the risk
involved in advancing larger loans, it covers the costs of repossessing
and reselling a property should a borrower default. In particular, it is
used to meet any shortfall between the outstanding loan and the price the
lender gets for the property. However, although it is the lender who
benefits from the insurance, it is the borrower (the homeowner) who pays
the bill. Even more horrifying is the fact that if the insurance is paid
out to a lender, the insurance company can then chase the original
homeowner for reimbursement, at any time over the following twelve years.
Mortgage Indemnity Policies are associated with loans normally over 75%
(occasionally 80%) of the property's value, so if a purchaser is able to
raise at least 25% of the purchase price they should not apply.
The second group of buttons in the margin show this
subject's linked pages - so click, read on and enjoy!
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