A new home will probably be one of the most expensive purchases you will make. Besides the property itself, there are other costs to consider. Whether you are a first time buyer, or you are just unsure about the costs of purchasing, here is our breakdown on what costs to expect when buying a new home.
If you are buying your property with a mortgage, your lender will normally charge an arrangement fee. This is an administration fee which can cost up to £2,000 (although this varies depending on the mortgage product you have chosen). This fee can be added to your mortgage or paid up front. A mortgage adviser will be able to advise you on the fees charged by each lender before you make your application. The lender will also need to carry out a valuation on the property and will send a surveyor to assess this. Some mortgage lenders charge this to the borrower.
Mortgage Broker and Adviser Fees
A mortgage broker or adviser will explain the most suitable mortgage type for you and
can assist you in making an application. Although they
are not essential, brokers can
be especially useful if you are unsure which mortgage you can afford and if you are concerned about your credit rating. You should expect to pay around £500 for a mortgage broker (although some do recover their fees from the lender so that you are not charged).
Many brokers offer a free no obligation consultation and your estate agent may also recommend using a certain broker.
Although your mortgage lender will carry out a valuation, it is advisable but not compulsory to get a full survey. This will assess
the condition of the property and highlight any issues which may prove costly in the end.
There are two types of survey.
A home buyer’s report costs between £350-£1000 depending on the value of the property. It will cover the general condition of the property. A building survey can cost between £500-£1300 and is a more in-depth survey covering the building’s structure and is advisable for older properties.
You will need a solicitor to carry out the legal work for you. A solicitor will carry out searches which can cost around £200 depending on the area of the property. The solicitor’s costs themselves will vary depending on the firm you instruct.
If you are purchasing a property costing over £125,000 (or indeed if you are purchasing
an additional property), stamp duty is payable. Stamp duty is charged as a percentage of the purchase price of your property.
You will need to insure the building as well as the contents. Insurance companies offer competitive rates, so it is worth shopping around.
On a practical note, you are likely to need help moving your furniture and belongings. It is worth enquiring with removal companies how much the move will cost you as this can vary depending on distance and amount to be moved.
By Louise Burgess – Levi Solicitors LLP.