Hidden costs when buying your new home

Mon 13 Jul 2015

When people look at buying a property, they often only consider the sale price but there are more costs to consider. Here’s a handy guide to some of the expenses involved in buying a new home.

Booking fee:

The booking fee is an up-front charge you have to pay while your mortgage application goes through. It typically costs around £99 but can vary or not be charged at all depending on the lender.

Mortgage arrangement fee:

Mortgage arrangement fee is the cost of setting up your mortgage with your lender. It typically costs around £1,000 but can vary up to £2,000. It is sometimes non-refundable (even if the purchase doesn’t go through) but you can usually add the fee onto the mortgage total although it will cost more later as you will pay interest on it.

Valuation fee:

The valuation fee is around £300 and is the charge lenders make for valuing the property to ensure that the property exists and that is also offers sufficient security for the loan.

Stamp duty:

If a property is worth more than £125,000 you will have to pay stamp duty land tax. This is charged at 2% for properties worth £125,001 to £250,000, going up to 5% at £250,001 to £925,000 and increasing in percentage for properties costing more. There are handy stamp duty calculators on the web that could tell you how much you’ll need to pay.

Surveys:

Survey are costly with an average price of around £400 to £700. The survey will help you to find out about the condition of the house and help negotiate for work to be fixed or the price to be lowered.

Legal fees:

You will need to hire a solicitor or licensed conveyancer to carry out the legal work. The typical cost can range from £500 to £1,500 and more if you choose to do a local search of the area for local plans or issues (an extra £250 to £300).

Electronic transfer fee:

This is around £50 and pays for the cost of transferring the mortgage money from the lender to the solicitor.

Other costs

Don’t forget to consider removal vans, initial home repairs, new curtains or blinds and additional furniture.