A Guide To The Costs Involved In A Commercial Mortgage

Each case is different and therefore the costs can differ with the individual circumstances. This section aims to give you a few rules of thumb that may help you budget for the various costs involved.

Valuation Fees

Some lenders have scale fees pre-agreed with their valuers and they give a firm price based upon the expected valuation. Others appoint the valuer they feel is most appropriate and leave you to discuss the price. One or two shop around to get you the best deal. As a rule of thumb, you can expect to pay between 0.25% and 0.5% of the expected valuation.

Lenders Fees

Again all lenders are different, some have 'one off' arrangement fees whilst others have a number of different fees for application, commitment, etc. However, these normally add up to a total of between 1 and 2% of the loan. Again using a good broker can bring these cost down in recognition of what the broker does. Fees may sometimes be added to the loan.

Legal Fees

How long is a piece of string? This is an area where you can make savings by shopping around but you should not compromise on quality. Ensure the solicitors you choose do a lot of commercial conveyancing and get them to quote on both cost and on a time scale. Some lenders will allow your solicitor to act for them or let you use their solicitor. This can mean substantial cost savings as you pay for the lender's legal fees as well. If the lender will use your solicitor then they will generally only do so if the practice has two or more partners. ICAN Finance can help advise with this.

Other Costs

The costs so far are what you would expect in each and every case. This section deals with the more weird and wonderful costs that are sadly sometimes forgotten:-