It’s an exciting time when you make the leap to buy or build a new house. For most, that first step on the property ladder feels as big of an achievement as sprinting over the finish line at the Olympics. The one huge pitfall of a property purchase is the cost. It can feel astronomical! You could have spent years saving for a deposit and penny pinching wherever you can to afford it, only to discover there are far more costs than you imagined!
The hidden costs of a property purchase can add 10% to the total bill. The smart thing to do is research as hard as you can for the hidden fees when you are saving the deposit. This way, you can save enough for the fees as well. The trouble with that is the fees aren’t always going to be the same as different companies have different prices. Paying for the new house and the costs of the years to come with the mortgage is huge, but what about those other costs? Where do they come from?
Stamp Duty. It’s not something that everyone knows about, but the official jargon for stamp duty is land tax and it’s applicable for the buyer to pay, not the owner. If your home is worth less than £125,000, you don’t have to pay it at all. However, you should look at the table hereto find out how much stamp duty you would have to pay on your new property, and get that amount saved up!
Conveyancing. This is the legal bit of buying a new home and will register your home with the land registry as well as cover various search fees. This does have a cost, and varies by solicitor. You can read this article to learn more about it.
Arrangement Fees. Did you know your mortgage company can charge you a fee for even arranging the mortgage in the first place? Sometimes this is a few hundred pounds and other times it can be 1% of the total cost. You should check with your mortgage provider whether they would charge you this fee and how much.
Surveying. You need to contact a qualified surveyor to check the house out on your behalf which can cost a chunk of money you may not have considered. It can be confusing to know what sort of survey you should have, so research is key!
Fees. Wherever you look, there are estate agent fees, mortgage indemnity fees and even brokerage fees. Some of these may not apply to you house purchase, but it’s always a good idea to double check so that you aren’t left out of pocket.
Moving to a new house is right up there with one of the most stressful things you can do. Buying a house, however, is on a whole other level. Pouring life savings into one venture can feel overwhelming and scary, but it’s the start of a big commitment that you’ll hold for the rest of your life.