The Many Cost of Buying a Home in the UK.

Buying a home is almost guaranteed to cost more than you think because it’s not just about getting a mortgage, grabbing the keys and, going straight to pack in, no, that’s not how it works. 

Aside from finding strategic ways to raise a mortgage deposit, there are some other costs to factor in to know the true cost, or at least, to have a better estimate of what it takes to buy a home. 

These are costs to factor in.

Mortgage arrangement fee

“An Arrangement Fee (sometimes called a Completion Fee or Booking Fee) is an administration charge made by lenders for arranging credit – usually for a mortgage or for a business loan and sometimes for car finance.”

You can expect to pay your lender an arrangement fee, although, it varies, £1,000 is typical. In some cases, this is non-refundable, even if the purchase falls through.

Valuation fee

“A valuation is an assessment of what your home is worth, calculated by a professional valuer. A valuation report is typically required whenever a property is bought, sold or refinanced. The valuation fee is paid to cover the cost of preparing a valuation report.”

The valuation fee offers sufficient security for the loan. Its cost varies according to lender and purchase price, but you can budget for £300.

Legal fees

Some lenders contribute to legal fees, especially with a condition of using a solicitor approved by them. If you’re paying for your conveyance, you’re looking at about £500-£800, depending on the purchase price.

Stamp duty

Stamp Duty Land Tax ( SDLT ) is what you pay when you buy a residential property or land above £125,00 in England and Northern Ireland. 

Unless you’re a first-time buyer when you pay zero stamp duty on the first £300,000 of any home costing up to £500,000. 

“As of April 2016, there is a 3% increase on top of current rates if you’re buying an additional residential property above £40,000 such as a second home or buy-to-let property.”

The easy way to find out how much is to use one of the many stamp duty calculators online, or contact me for direction with buying a home. 

Surveys

This is another costly aspect of purchasing a home, with a typical survey costing between  £400 to £700. Many people pay for surveys on purchases that do not end with a deal, so budget for two or three as it might sometimes be the case.

Before you buy a property, get it checked by a surveyor. This is vital so you understand if there are any problems before you buy it, as it could save you money on repairs in the long run.

Removal costs

“Unless you can pile your belongings into the back of a car, factor in a removal van. These start at £100 for small local moves, but can easily run to £1,000 for shifting a family’s worldly goods long distances.”

Home repairs, furniture, and extras

From paintwork to leaky sinks, put aside some cash for unexpected property maintenance. And if you have to buy everything from beds, sofas to lawnmowers and carpets, you figure that in too. 

There might also be the need for some essential extras like light bulbs, lampshades, toilet brush, washing up bowl, doormats, hooks and extension lead. 

Do you see that when you sit down and write out these things, you will discover that there are other costs of buying a home other than the mortgage deposit itself?

All of these when factored in, make the process of purchasing a house easier and achievable in record time.  

Do you have any more questions on this, need any kind of help in the property investing and your personal development? I’m here to help you, so click below to book a free 30 minutes call with me. 

Book a call with me here.

Sources: 

  1. https://www.checkmyfile.com/jargon/arrangement-fee.htm
  2. https://www.ratecity.com.au/home-loans/faqs/valuation-valuation-fee
  3. https://www.moneysavingexpert.com/mortgages/house-buying-guide/

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