7 Unexpected Costs When Buying a Home

Moving to a new house should be an exciting time, but for the unprepared, it can also be a very stressful time. Naturally, one of the primary concerns for any individual, couple, or family who is buying a new home is going to be the issue of money. Buying a home is expensive in itself, but there are a whole host of other, less apparent costs which need to be factored in to your buying decisions.

The following are 7 common costs which many people fail to account for when they are getting ready to buy a new home. You should familiarise yourself with all of these beforehand.

Mortgage Fees

As well as needing to put down a deposit, you will also need to think about any fees and charges that are likely to be levied by your mortgage provider in order to process your application.

In some cases, these fees won’t be too bad. But there are a number of reasons that a mortgage provider might charge fees, and they can quickly add up. For example, the fees charged for making an initial valuation can be a couple of hundred pounds, while mortgage arrangement fees can add anything from £100 to £1000 on to your bill. These are major costs if you are not prepared for them.

It should be noted, however, that not every mortgage provider will charge these fees. The fees charged will vary from lender to lender, so you should find out as much as you can about fee structures beforehand so that you have this information when comparing services.

Some lenders will give you the option of adding these costs to the total of your loan, rather than requiring a lump sum payment upfront. This can make a significant difference for some people. In fact, it can be the difference between being able to buy a home and having to wait to shore up your finances.

Stamp Duty

The amount that you pay in stamp duty will be proportional to the amount you spend on your home. Since November 2017, first time home buyers who are spending less than £300,000 are exempt from stamp duty. Anyone purchasing a house which costs up to £500,000 will only have to pay 5% on the value above £300,000.

If you are not a first-time buyer, and your home costs £125,000 or more, you will be required to pay some level of stamp duty.

Surveyor’s Fees

Having a surveyor look over a property before you commit to buying it is a sensible idea, even if you initially balk at having to spend the money necessary to do it. However, this is one area in which you do not want to skimp. Having a surveyor conduct a check of a property before you make an offer on it will give you a good idea of whether the home is ready as it is, or whether some repair works will be required. This reduces the chances of encountering nasty surprises after you move in.

A basic survey won’t cost you too much as you can commission one for as little as £250. However, it is worth spending the extra cash to get a more comprehensive report, such as a structural survey or home buyers report. If these surveys throw up any issues, you can adjust your offer for the property accordingly. The point is, you need to arm yourself with as much information as possible about the property before you move in.

Legal Fees

You will probably want to hire the services of a solicitor to go over all your paperwork relating to the property purchase. This is another area where you would be wise to spend above the minimum on ensuring you hire the right person. Any errors made now with regards to paperwork and other legal aspects of your purchase could end up costing you significantly down the line. Hiring a competent lawyer now will prevent such a situation from ever arising.

Once you have identified a suitable solicitor, you should then have them also conduct a search on your property. This will reveal if there are any plans relating to the property that you were not aware of, for example, plans to construct a high-speed railway through the garden. Fees don’t usually cost more than £250 for this kind of service.

Estate Agent Fees

If you are buying a new home, you may well also be selling another property in order to cover some of the costs. If you are, you will need to remember that some of the profits you make will be spoken for.

You will often have some room for negotiation on this point when you are dealing with estate agents, so don’t be afraid to haggle with them and try and secure more favourable terms, you never know what savings you might be able to make.

Electronic Transfer Fees

This is without a doubt one of the most annoying of the unavoidable expenses you will have to endure when buying a property. Electronic transfer fees are essentially fees charged by your lender for going to the ‘trouble’ of moving lots of money around. Fortunately, these fees shouldn’t set you back more than about £50, hardly a deal breaker.

Moving Costs

Before moving house, a lot of people assume they can move their belongings by themselves. However, the majority soon discover that such an approach is fraught with difficulties. Not only is moving all your stuff by yourself physically demanding, there is also a much greater chance that your belongings become lost or damaged. This is why moving costs often become an unexpected expense.

If you want to minimise the potential for something to go wrong, hiring a professional moving service will give you peace of mind. There are many businesses offering UK house removals, and it is wise to hire their services instead of attempting house removals on your own.

In addition to providing you with peace of mind and the knowledge that your possessions are in the hands of professionals, a professional removal service will also have experience in handling the more difficult pieces of furniture and other items you might not know how to handle yourself. If you haven’t ever moved house before, it will be useful to you to have people to watch and learn from.

Another consideration, and a compelling reason to hire a professional moving service, is health and safety. If you don’t really know what you are doing, there are numerous ways that you can injure yourself trying to move furniture and possessions on your own, so why take the risk?

Finally, engaging the services of a professional moving service will save you time. Packing and readying all your stuff for when you move is a long and time-consuming process, it makes much more sense to have a professional business handle everything and save yourself the worry.

When you are buying a new home, it would be nice if the only thing you had to pay for was the house in question. In reality, there are a plethora of costs and fees involved. Learning how to navigate these, and what to expect, will prevent any unwelcome surprises further down the road.

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