Anyone whose read my blog in the last few months will probably know my pending plans for me and Luke to buy a house. I plan on putting my current flat up for sale around March 2019 so we can get that sold next year then we might move back in with my parents for around 6 month’s to save a little more for some of the additional costs associated with buying a property, with the hope we’ll be in during 2020 which is really exciting.
Finances are of course the biggest part of buying a house and something I know is a big thing so I thought I’d do a post talking over all the costs associated with buying a property. Of course this list isn’t limited and there will probably be other things, if you can think of any let me know so I can add them to my ever growing list of what we need to save.
Of course the deposit is the most important of the costs associated with buying a property and without it you won’t be able to proceed. This is the amount you put towards buying it and you’ll need at least 5% but generally nearer 10% off the property price. The bigger the deposit you put in the more likely you will be to get a mortgage and get a good rate so this is very important. I’m planning on using a good bulk of what I make from my flat to cover our deposit.
This is the other biggie which can get very pricey. This is a government tax which is paid on all houses costing £125,001 or more, although if you’re a first-time buyer you pay nothing on the first £300,000. I’ll have bought and sold a house and Luke will have never bought before so we’re not quite sure what we will be classed as so this is a question on my list to ask a mortgage adviser when we make an appointment.. You can use the Stamp Duty calculator to get an idea of how much you’ll be likely to pay.
Some mortgage lenders may charge a valuation fee where they assess the value of the property to establish how much they are prepared to lend you which can range from £150- £1,500 depending on the value of the property.
Something you need to do before buying a property is to get it checked by a surveyor to see if there’s any problems before you buy it. This is so important as it could save you money on repairs in the long run and establish any issues which might help you push to offer less than asking. Costs associated with buying a property usually just feel like you’re throwing money away but this one can actually save you. A basic home condition survey can cost around £250 but a full structural survey is nearer £600, perhaps even more.
When you buy or sell a house you’ll normally need a solicitor to carry out the legal work and these fees can cost around £1000-£1500. There’s also an option to do a local search for around £250-£300 which checks whether there are local plans or problems.
Electronic transfer fee
This is the cost which covers transferring the mortgage money from the lender to the solicitor and is generally around £45. I don’t quite understand this fee when you’re paying so much but it’s something little to consider as all the costs associated with buying a property add up.
There are normally some fees associated with setting up a mortgage which can include:
- A booking fee £100-250
- An arrangement fee of up to £2,000
- Mortgage valuation fee £150+
You can add these costs to your mortgage but it’s best to pay them upfront if you can otherwise you’ll be paying interest on them.
Other costs associated with buying a property to think about:
- Insurance- Lenders will require you to take out buildings insurance and it’s a good idea to have contents cover for your possessions as well
- Life insurance – You never want to think about death but this would cover to pay off your mortgage if you pass away
- House removal costs – You can hire a van and do it yourself but either way there’s a cost involved
- Storage costs – If you need to store some of your items you might have costs involved with this. If we move back in with my parents it’s something we’ll 100% need as we have a lot of furniture and stuff we’ll be taking.
Another thing to think about in the future is equity release which could provide you with extra funds should you need it in the future. It is the difference between the market value of your property and any outstanding mortgage or other debt secured on it which can be released. Sunlife have a great article on ways that 5 people have spent their equity release.