[Anonymous]

my lawyer is saying that if you take on the builders mortgage that there is still mortgage set up fees and stamp duty to pay.

my understanding is that you would not incur these fees by taking on the builders mortgage.

any info appreciated.

[Anonymous]

Hi Dorothy,

Whatever mortgage you take there will always be Notary fees and stamp duty to pay. These costs are unavoidable as the mortgage has to be transferred to you.

The arrangement fee is a different matter. It all depends upon the ‘deal’ you are being offered. Sometimes there is no arrangement fee, sometimes it is reduced (for instance 0.5% instead of 1.0%). Always get a competitive quote just to see where you stand.

I hope that helps

Mark

[Anonymous]

thanks mark,

i have read on a couple of legal sites that in most cases one wouldn’t pay arrangement fees or stamp duty.

see devwatch.com/info/faq.html

would you mind commenting after reading this

thanks mark

[Anonymous]

Hi Dorothy,

My mistake on the stamp duty issue. I should have said registration fee. The developer has already paid stamp duty when he took out the original mortgage (of which you would be taking over the part that corresponds to your property). So no stamp duty, but yes you still have to pay Notary fees and registration fees. On the mortgage arrangement fee it may be zero or reduced – it depends upon the ‘deal’.

However when taking out a mortgage the most important issues by far are the overall conditions of the mortgage. Set up costs are important but compared to the interest rate, life time and loan-to-value they are just details. The conditions of the mortgage will determine the cost over its lifetime. You’ll soon forget about the 1% you saved up front if you end up paying 1% more each year over 20 years. Therefore always get a competitive quote or two when considering whether or not to take over the developer’s mortgage.

Mark

[Anonymous]

thanks for advice and info mark

[Author]

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