What Costs To Consider When You're Buying Your First Home
When thinking about buying your first house, it is easy to focus your attention on saving the deposit and forget about the rest of the necessary outgoings. Whilst the deposit may be the biggest sum required, it is important to look at the whole picture when working out your overall budget.
- Stamp Duty
Any house over £125,000 will attract stamp duty land tax, which increases with the value of the property. It should also be noted that if a second property is being purchased, stamp duty is payable at a higher rate on any property over £40,000. Stamp duty must be paid no later than 30 days following completion, though most solicitors will require the funds to be in their account prior to completion. A stamp duty land tax calculator can be found here.
- Mortgage Costs
When applying for a mortgage, there are some unavoidable costs. Before issuing a mortgage offer, the lender will require a valuation and/or survey to be carried out and paid for up-front; some mortgages also have up-front product fees, though some product fees may be added to the mortgage amount and paid over its term. In addition, unless you approach a bank directly, there will be a fee payable for a financial advisor.
- Legal Fees
When buying a property, you will need the assistance of a solicitor. In addition to the costs which solicitors charge for legal work, there are a number of disbursements (payments to third parties such as drainage and other searches) involved. When obtaining a quote for conveyancing, always ensure that you ask for the cost of all disbursements so that these can be accounted for from the outset with no hidden surprises.
- Removal Costs
Although it may be your first house purchase, you may have been renting and therefore need to plan and account for the costs of moving your furniture.
Once you own the house, you will no doubt want to put your own stamp on it. Some changes are more costly than others, and it would be a good idea to decide what needs doing to the house immediately to make it liveable for you and prioritise other jobs according to your budget.
Finally, you will need to take in to account the cost of essential furniture items, for example to ensure that you at least have somewhere to sit and sleep.
We can give you a competitive conveyancing quote and explain step by step everything you need to know where ever you are deciding to make your first home.
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