The Costs of Buying a Home & Moving

Buying a home can be quite costly, especially for first time buyers and home movers. The expenses can even increase when you are buying and selling at the same time. In this article, we will break down the costs and provide a timeline of when payments are due.

Deposit

When buying a house, one of the biggest expenses is the deposit. The amount you need to put down will vary based on the property’s price. If you have a 5% deposit and your offer is accepted, the mortgage lender will provide the remaining 95%.

The more money you can put towards the deposit, the more favourable mortgage options you may be able to qualify for. Our mortgage advisors can guide you through your options.

Estate agency fees

You only need to pay for an estate agent if you are selling a property. The fees charged by agents can vary widely. Online estate agents tend to be the cheapest as they do not have to maintain offices. However, if you prefer a more personalised and local service, you may opt for an estate agent who may charge 1-2% of your selling price.

It is important to note that fees are usually negotiable, especially in a “seller’s market” where agents compete for instructions due to limited properties on the market.

Survey

When applying for a mortgage, the lender will want to ensure that the property you are buying is worth the amount you are paying for it. Some lenders may provide a free basic mortgage valuation, but you may not receive a copy of the report. If the lender does not offer a free valuation, you may need to pay several hundred pounds for this.

If you want a more detailed Homebuyer’s Report, you can expect to pay roughly double the cost of a basic mortgage valuation. The most expensive option is a top-of-the-line building survey that may cost you a four-figure sum.

Our mortgage advisors can guide you through each survey option so that you can make an informed decision. If the property is in poor condition, it is advisable to upgrade the survey. While a good survey may be costly, it is a small price to pay compared to buying a property blindly and having to spend a lot of money on repairs over the years.

Mortgage arrangement fees

When it comes to mortgages, it’s common for the ones with low interest rates to come with high fees. These fees can range from zero to a few thousand pounds.

If you’re borrowing a large amount, it’s important to keep the interest rate as low as possible. However, if you’re borrowing a small amount, it may be cheaper to opt for a mortgage without fees.

It’s worth noting that lender arrangement fees can be added to your mortgage. If you choose to add a fee, you’ll be charged interest on it, and this can significantly increase the total cost of your mortgage over time.

Our mortgage advisors will help you find the most affordable option for your needs, considering all fees and calculating the total cost over the term of the product.

Solicitor’s fees

To ensure a smooth purchase process, it’s essential to hire a solicitor who will handle the legal aspects. They will check various things, such as property ownership, responsibility for maintaining adjoining fences/walls, and any lodged plans that may affect your ability to sell the property in the future.

When comparing solicitor fees, it’s important to check if the quote includes VAT and local searches. Keep in mind that not all solicitors are on the “panel” for all lenders, so choose wisely.

Our mortgage advisors can assist you in selecting the right solicitor for your needs.

Stamp duty

Stamp duty is a tax that certain purchases may be subject to. The regulations regarding which purchases are subject to this tax may change periodically. To confirm whether this tax is applicable, it is recommended that you check the relevant information on the Government website.

If stamp duty is due, you will typically pay it to your Solicitor upon completion, who will then forward the payment to the Government on your behalf.

Mortgage broker fees

It’s common for mortgage brokers to charge fees, which are usually based on the amount the Lender pays them for their services.

However, we only charge a fee when we are successful and have secured a formal mortgage offer for you.

Removal fees

If you want to minimise stress during the moving process, it may be beneficial to consider hiring a removal company that specialises in furniture handling rather than renting a van and doing it yourself.

Written by
Malcolm Davidson
Managing Director of UK Moneyman Ltd.
MAQ & CeRER Qualified

22nd April 2024

About the Author

Malcolm Davidson

Managing Director of UK Moneyman LTD

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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