Buying a home is certainly one of the biggest financial commitments you will ever make in your life. On top of your deposit and other obvious costs, there are plenty of surplus charges and fees to account for as well — legal fees, stamp duty, removal costs, etc. Find out what hidden costs of homebuying you need to be prepared for.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Stamp duty land tax (SDLT) isn’t exactly a hidden cost, but many people forget to factor it into their budget when beginning their property search. SDLT applies to residential properties involved in sales over £125,000, and all nonresidential properties or land in sales over £150,000. Buyers are responsible for paying stamp duty and is due upon transfer of ownership.
Conveyancing, surveys, and valuation fees
Conveyancers are responsible for transferring the ownership of a property from one party to another, and are required when buying or selling a home. A few conveyancing fees include land registration fees, transfer fees, and local authority searches. A few factors will influence the cost of conveyancing, such as the value of the property, whether it’s freehold or leasehold and the local searches that need to be completed.
Mortgage lenders carry out valuation surveys to determine the property’s worth. The cost of this survey will vary based on the type of survey you get.
Mortgage arrangement and other fees
At different points in the mortgage process, there will be different fees required. The costs could range from administration fees to electronic transfer fees or even bigger charges meant to cover essential services that will all impact the total cost of your mortgage. These will all be displayed in the paperwork from your lender, so be sure to confirm the added expenses as soon as possible.
Estate agent fees
You will most likely work with an estate agent to find your dream property. While they can help you find the exact home you’re looking for, they don’t work for free. And estate agents’ fees can add thousands of pounds to your homebuying budget. If you use a highstreet estate agent, they work on commission, which is a percentage of the purchase price, and as a buyer, you are responsible for paying it.
While buildings insurance is usually mandatory with a mortgage, consider contents insurance to protect your belongings too. You could even get a deal combining both. Other policies like life insurance, critical illness insurance, or income protection are all designed to help you or your family cover costs, such as a mortgage, while you’re unable to provide an income.
Paying a removal company can take some stress out of the homebuying process, but of course, it doesn’t come free. Costs will vary depending on the size of your property, the amount of items you want moved, and the distance it needs to be transported. Don’t forget to add this expense into the budget if it’s something you’re interested in.
If you’re thinking of moving, whether it’s to your first home or your dream one, we’re here to help you find the right mortgage deal for you. Get in touch now.