You have been saving for the last few years and at last you are ready to take the plunge to buy your first home, but what are the full costs going to be?
Well for most of us it is going to involve taking out a mortgage. For this you will need to speak to a mortgage adviser. The mortgage adviser could be an independent broker or linked to a bank or building society. They work out how much you can borrow based on your salary, what savings you have and your credit score.
Your savings will act as your deposit. A deposit of between 5% -20% of the property price is paid upfront by your solicitor to secure the property. It is advisable to have the biggest deposit you can afford to ensure a favourable mortgage rate.
To arrange a mortgage your adviser will charge a fee for his work and the mortgage lender will charge you a mortgage arrangement fee. Before the mortgage lender agrees to lend you money they will require a report called a Mortgage Valuation to check that the property‘s cost is in line with current market values, as well as other basic checks on the condition of the property. You are required to pay the mortgage valuation fee.
In addition to the valuation you will have to pay for a Homebuyer’s Report. That looks at all visible aspects of the home and recommends changes as well as any causes for concern. It will be cheaper if you use the same person who is doing your Mortgage Valuation.
The last report to pay for is a Buildings Survey. This is particularly valuable if you are buying an older property or one which has had alterations. The surveyor will look thoroughly for problems with structure of the building like damp and rot. They will also provide you with estimate prices for maintenance work.
Once you have these reports read them all carefully before proceeding to buy your home
Stamp Duty is a charge on any home which costs over £125,000. For homes costing between £125000 -£250000 the stamp duty is calculated as 2% of the property value. Over £250000 the stamp duty is 5%
A solicitor or conveyancer carries out the legal side of buying a home. They will organise local searches, pay disbursements, handle the mortgage transfer and settle the Land Registry fee. They will charge a solicitor fees for their work.
And finally, when you do move into your new home you need to pay for a removal company and buy home insurance.
For more advice on buying your first home contact Peter Robinson & Co on 0161 678 7996