22/11/2013
work out the true cost of buying
It's not as easy as get a mortgage, grab the keys and, bish bash bosh, you're in. Buying a home's almost guaranteed to cost more than you think. Here's what to factor in.
Mortgage arrangement fee. Expect to pay your lender an arrangement fee. They vary but £1,000 is typical. In some cases this is non-refundable, even if the house purchase falls through.
Valuation fee. This is the fee lenders charge for a valuation to check the property exists and that it also offers sufficient security for the loan. The cost varies according to lender and purchase price, but budget for £300.
Legal fees. Many lenders will contribute to legal fees, although in that case you would have to use a solicitor approved by them. If you pay for your own conveyancing, you're looking at about £500-£800, depending on purchase price.
Stamp duty. Buy a property for more than £125,000 and you're likely to have to pay a percentage of its price to the taxman. The easy way to find out how much is to use our Stamp Duty Calculator.
Surveys. These are another costly aspect to any purchase, with a typical survey costing £400 to £700. Many people pay for surveys on purchases that fall through, so budget for two or three.
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.
House repairs. From flaky paintwork to leaky sinks, put aside some cash for unexpected property maintenance. As MoneySaver Delphinum says: “If it's an old house, expect Frank Spencer to have done every piece of DIY work. Expect to undo everything and do 10 other things you didn't expect to do before you start a job."
Furniture and extras. Currently renting a furnished place? Remember you'll need to buy everything from beds and sofas to lawnmowers and carpets.
Then there are the boring but essential extras: light bulbs, lamp shades, toilet brush, washing up bowl, door mats, hooks and extension leads. See how to furnish your pad for free on Freecycle and Freegle.
