April 17

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5 Hidden Costs First-Time Buyers Overlook


Buying a home is probably one of the biggest financial transactions you’ll ever make, and that expense goes far beyond the closing price. Apart from the cost of the home, there are several upfront and ongoing expenses that often catch first-time homeowners off guard.  

Here’s a rundown of everything you need to budget for so that you know what you’re getting into before buying a home:

1.     Stamp Duty

If you’re buying a home in Northern Ireland and England for £125,000 or more, you’re liable to pay Stamp Duty Land Tax (SDLT) on your purchase.

If you’re purchasing a home in Wales, you’ll pay Land Transaction Tax (LTT) and in Scotland, you’ll have to pay Land and Buildings Transaction Tax (LBTT) instead of Stamp Duty.

However, first-time buyers in Northern Ireland and England are exempt from paying Stamp Duty Land Tax on properties that cost up to £300,000.

2.     Valuation Fee

You have to pay a valuation fee to get your new prospective home valued in order to confirm to the mortgage lender that the house is worth the sales price. If you don’t keep up with monthly mortgage repayments, your mortgage lender can repossess your home, sell it and recoup its money.

Some lenders may not charge a valuation fee, but if they do, the valuation fee is usually around £200-350.

3.     Surveyor Fee

While a valuation survey only checks the property for its worth, a property survey checks for potential problems in the property like subsidence or structural issues. It’s well worth to get your property surveyed by a professional before you buy it. In case you get a bad survey report for the house you wish to buy, you can use this information to negotiate the price.

A survey fee can cost anywhere between £300 and £1,000, depending on how detailed the survey is and the value of the property.

4.     Conveyancing Fees

Conveyancing refers to the legal process that’s involved in buying a property. Your conveyancer can either charge a percentage of your property’s value or a flat fee which can range from £500 to £1,500, depending on the type and location of the property, in addition to £250-450 for disbursements (local searches).

5.     Household Bills

While household bills aren’t strictly related to the cost of the home, but these costs are part of the homeowner’s responsibility and are unavoidable. Studies have shown an average household expenditure amounts to nearly £572 per week.

These include utility bills like water, gas, electricity and broadband bills, in addition to mandatory costs like council tax, buildings and contents insurance, and ground rent and service charges.

An expert mortgage advisor, like the ones at Sterling Capital Group, can help you make informed decisions and guide you through your first home-buying experience.

get in touch with us today for more information 0207 822 2390.

 

‘YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP ON YOUR MORTGAGE’

‘SOME BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY’

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