When you are looking to buy a home, having enough money for the hidden fees is sometimes expensive, especially if you are on a budget. Finding the money needed is stressful, but knowing what to expect can save you from worrying about how to pay for the unexpected. Often these bills are not cheap, and sometimes finding the money to pay is difficult, especially whilst you are trying to organize buying a home.
There are areas that you need to make yourself aware of that can increase the costs involved in purchasing your home.
- Stamp duty, is paid to the government, but the amount paid will depend on the price of the property. There is a limit, if the price is under £125,000 there is no stamp duty, but as the price of the property increases, so too, does the amount of stamp duty required. There is a maximum of 7% but these are for properties over £2 million.
- The amount of legal fees that you need to pay increases with the searches which the solicitor has to complete; part of these fees are payable to the Land Registry.
- If you require a mortgage then having the home valued is important, it allows for the mortgage company to assess the value of the property and to make sure that it is in line with the amount on the application; unfortunately some companies charge for this service.
- Not only do mortgage companies charge you for the interest that you need to pay, but also they will charge you for the product that you choose. These can go up to £1000 for the mortgage product, therefore, ensuring you have the best deal, is vital. Sometimes, you can add this money on to the cost of your mortgage, this reduces the need for another bill you need to pay. But unfortunately you end up paying interest on this amount for the entire term of your mortgage. If you only fix for a couple of years at a time and add the product fees to the mortgage you are increasing the amount you owe instead of decreasing.
- Estate agents fees are only applicable if you are selling a property, but they are as high as 3% of the total cost of the sale of the home.
- Factoring in the cost of moving is important, if you are planning to do the move yourself then the cost of a van to hire and a lot of help from family and friends is important. However, if you hire a company to do the move for you, the prices will vary; it will depend on the amount of items they have to move and the distance to the new location, will affect the price. It is important to get a number of quotes; it doesn’t mean that you should go for the cheapest either.
Being prepared for the other costs of moving is important, and once you move in there might be more costs and bills that you haven’t considered, having the money to pay for these bills is going to save you time and money in the long-term.