Saved up enough for a deposit? Ready to make the biggest purchase of your life? Well STOP right there and read the below! There may be things that you haven’t thought about before you commit to buying a house. Read my blog to find out if there’s any extra fees that you may not have thought of….
Mortgage set-up fees – When looking for your mortgage you may find those that have the lower monthly cost do incur a set-up fee which is usually an upfront fee to reserve the funds on a fixed deal.
Mortgage Arrangement fees – This is separate to the set-up fees and will only be applicable to some lenders dependent on the deal you’re going for but there is an upfront cost separate to your monthly payments – this is basically like an admin fee but can sometimes add a hefty figure to your fees. With most lenders you are able to add this to your monthly payments but you will be charged interest.
Valuation and survey fees – Whilst most lenders tend not to charge for this there are some still out there that do depending on the product you’re buying, this all depends on the value of the property and the level of survey you wish to choose. These can be between £100 – £1000.
Mortgage broker fee – If you’re buying a new build and you go with their recommended providers then you won’t have to pay a broker fee however if you’re hiring an independent broker to arrange your mortgage you will have to pay a fee of around £500. It’s worth checking whether this cost can be used to cover your next mortgage deals, to save you having to pay another broker.
Searches – These are included in your legal fees but are something to consider. Searches will be charged by the local council and these check deeds, drains, planning authorities and local issues. This can cost between £200 and £300 altogether.
Legal Costs – Again if you’re buying a new build it’s worth asking if they will cover your legal fees if you use their recommended panel of solicitors but you should expect to spend up to £1500 on legal fees dependent on the value of your property. This covers the work that is carried out by the solicitor.
Stamp Duty – Stamp duty is for all home buyers in the UK unless you’re buying your only property for under £125k or your second property under £40k. The percentage of stamp duty you’ll be charged is dependent on the value of your property.
Moving Costs – If you already have a house full of furniture and need professional help moving your belongings you need to factor these costs into your budget. Different providers will include different things as part of their package. Some providers will pack the furniture for you and wrap it up to avoid damages. On average a full three bedroom house worth of furniture costs around £800.
Building Insurance Fees – In order to secure your mortgage you will need to buy your building and contents insurance. For your mortgage you will only need building insurance but it’s probably best to buy the two together. Make sure you shop around and are accurate as possible. The average home insurance is around £270 a year but this can be paid monthly.
Life Insurance Fees – Not always nice to think about but it is necessary. If you lose your job, get ill, develop a critical illness etc then it’s better to be safe and have the insurance in place. Shop around for the best deal and be aware of your family history when submitting your applications – this can range anywhere from £8 to £100 a month dependent on the package you want. You can tie your insurance to your mortgage to save costs meaning the provider will pay out less as your mortgage becomes less over the years.
Hopefully this blog can help you when buying your house, it’s the biggest purchase of our life’s and ultimately it’s better to be prepared. My next blog will be looking at household bills and items that you need to take into consideration when buying a house.