The associated costs of buying a home are often overlooked in favour of the major expense, the house itself.
It’s easy to come unstuck if you fail to budget along the way for these often hidden, one off costs.
Costs range from search fees to mortgage arrangement fees and can add up to thousands of pounds with many first-time buyers, in particular, getting caught out by the extra fees they will have to pay.
Here are some of the main costs associated with buying:
One of the largest chunks of money goes on Stamp Duty, which is charged at 3 per cent for properties valued at between £250,000 and £500,000. It compares to just 1 per cent for properties valued at between £125,000 and £250,000.
Fees on average tend to cost around £1,000 depending on the services you require for the purchase. Make sure that you get a quote upfront before the solicitor does any work as some will charge by the hour, while others will do the job for a set fee.
Lender related fees
There are then smaller costs that may need paying depending on what deal you have struck with your lender. These include valuation fees paid to a lender for checking the property is worth the amount they are lending and a booking fee for selecting a mortgage deal. A larger cost is likely to be a mortgage arrangement fee, which can run into several thousand pounds. However, a lender may offer some or all of these charges for free depending on the mortgage deal you have agreed and so it is worth checking on the details and shopping around.
You will also need to budget for a survey of the property and for searches for anything unusual about property. Searches are conducted via the Local Authorities and are designed to check whether there are any issues such as planning permissions or planned roadworks that are in motion that may effect the property. These tend to cost around £500 each, but it again depends on the scope of the survey required.
And don’t forget the all-important removal fees as these can also run into several thousand pounds depending on the services your require.
More information about buying a home can be found on the Zoopla website.
Some information contained herein may have changed since it was first published. Zoopla strongly advises you to seek current legal and/or financial advice from a qualified professional.