Costs to Consider When Buying Your First Home

If you’re thinking about buying your first home, then it’s important you know exactly how much it’s going to cost you – not just how much the property itself is worth, but everything that comes with it too. Having worked as the Director of Hunters Estate Agents in Maida Vale for a number of years now, I understand that buying your first home is a very expensive time in your life, and many people have to save up for years. If you’ve decided that you’re ready to buy your very first house, then see the list I have put together a list of finances that you need to take into consideration:

When buying a house, the deposit is the single biggest expense you will have. The amount it will cost you will depend on the price of the house you are looking to buy and the mortgage agreement you have secured. A deposit tends to be between 5% and 15% of the total property value.The more money you save up, the better your mortgage options will be. Try and set up an ISA for your deposit and arrange a standing order that puts a chunk of your salary into the ISA each month – this will put you in a better position when it comes to finding a property to buy.

Stamp Duty
Stamp duty is paid on the land and property transaction you make, and the charges changed quite recently in this country. They are now based on certain thresholds and depend on how much your property is worth. The charges on stamp duty are now 0% under £125,00, 2% between £125,000 and £250,000, 5% between £250,000 and £925,000, 10% between £925,000 and £1.5m, and 12% on properties that cost over £1.5 million. Make sure you work out what stamp duty you will be paying before buying a house in case it pushes your budget over the limit.

Some mortgage lenders will charge you a set-up fee, and this can be anywhere between £100 and £250. If your mortgage application falls through you could get the amount refunded though. This fee is specifically charged to reserve the funds for your property and fix the deal. Other mortgage fees include an account fee of between £100 and£200 to cover maintenance and account closing costs, and an arrangement fee of up to £2,000, which can be paid up front or added onto your total mortgage cost.

Legal and Moving Costs
Whatever type of property you decide to buy, you will need to hire a solicitor to help you with all the different legal processes involved, such as signing over the home. This can cost up to £750 and is essential. Once you have secured your new home you need to think about moving in. A removal service may be pricey, but is usually worth it. They will safely pack up all your belongings and drive them to your new home – the cost usually outweighs the time and effort it would take to do it yourself.

Valuation and Survey
Getting a home valuation and property survey is a necessary part of buying a new house. It can cost as little as £150 but can go up to a staggering £1,500. The price will depend on how in-depth an investigation you want to have done on your home. If you are looking to buy an older property, then it is usually advised to get a full house check before putting in an offer to make sure you won’t be faced with any pricey repairs once you own the property. The three main checks that take place are a home condition survey, a homebuyer’s report, and a structural survey.

Author’s Bio
This article was written by Gideon Gold, Director of Hunter’s Estate Agents in Maida Vale

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