Saving for a house is a big challenge, and it still takes people ages to save up enough for a deposit for their first home. Help To Buy and 95% mortgages help, but with house prices rising, you’re still going to need a large deposit to stand a chance of getting on the ladder.
After years of saving, finally having your deposit amount can be an exciting time and feel like a major achievement – you’re ready to house hunt! But what about the other costs that are incurred when buying a house, have you thought of those? Keep surprises to a minimum by considering the following costs associated with buying a home.
Buying a house is probably the largest financial transaction you’ll ever make, with a lot at stake if it goes wrong. You’ll need a solicitor to take care of all your paperwork and make sure that everything is above board with your house purchase. Your legal fees will cover everything from searches to land registration – but be prepared to pay anywhere between £1000 and £1,500 for their help. Legal fees are due on completion, so you might have time to save some extra money for this during the process.
The good news is that Stamp Duty has changed for first-time buyers in England, with nothing to pay on a first home purchase of up to £300,000. For anything above that, you’ll need to pay 5% of the home’s value. If you’re buying your second home, you will still have to pay – so it’s worth bearing that in mind. Stamp Duty will be paid via your solicitors when you complete, so this is another saving that you’ll need. The rules are different for people in Wales, Scotland and Northern Ireland, so make sure you check out the requirements for your country.
A homebuyer survey is a must when buying a home to make sure that you’re not faced with any unexpected problems or repairs that the seller is either unaware of or is trying to hide from you. A survey is unnecessary on a new build, but you’ll need a snagging survey before you move in. Allcott Associates offer a full survey service which includes a valuation of the property, so make sure you know when you’re paying for before you commit and choose reputable surveyors to carry out your survey. The price of a survey begins at £400, and you’ll want this as you’re agreeing contracts to make sure you’re getting a fair deal.
A mortgage fee
Yep, even though you’re going to be paying your mortgage for the next couple of decades – you’ve still got an extra cost to pay upfront to even apply. Your mortgage fee can be anything from £500 – £2,000, although some lenders will provide cashback on completion. You can add your mortgage fee to your mortgage, but remember that you’ll pay interest on that if you do. Do a mortgage comparison to weigh up the different options available to you.
These extra costs can come as a shock when buying a house, so make sure you’ve thought about them before you commit to buying. If you’re feeling confident you’re ready then get started with that house hunt! Check out some tips on what not to look for when buying a home to make sure you choose the right property for you.