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Buying any kind of property is obviously a huge investment, and you may find yourself struggling to get your deposit together to secure a mortgage. However the deposit isn’t the only expense in terms of buying a property, so it’s important to understand the many hidden costs of buying and owning a property that you may not have thought of. This will help you to budget properly so you can cover all costs, as well as prepare for running your own home, which is often much more costly than you may think, particularly if you have been renting for a while previously.
Depending on the cost of your new home, stamp duty can add many thousands to the overall cost of your property, which is why many people consider properties under the stamp duty threshold. The conveyancing process itself can consist of numerous things that end up being costly. Most people are familiar with legal fees but there are also other costs to consider such as search fees, surveyors fees, registering with the Land Registry and any extras you may want done to help with the process. These can include valuations and different types of surveys – yes there’s more than one! – which can cost in excess of £1000. You may also have to pay a mortgage arrangement fee which can amount to several hundred or even into the thousands of pounds. Depending on your mortgage provider, they may add it to the overall mortgage whereas others may expect it paying upfront, so be sure to check with them before committing to anything you are unsure of. You may also need to pay a mortgage indemnity fee which covers insurance in case you cannot pay back your mortgage. Again be sure to check the details of any fees with your mortgage provider.
The seller normally pays estate agent fees but if you are selling a property at the same time as arranging to buy a new home then you’ll need to be sure to include these in your budget which could amount to quite a hefty sum. Other things that people often forget to factor in, can be things such as removal services which can vary from a few hundred to a few thousand pounds depending on the amount of furniture and household goods you need moving and also the distance or area you are moving from and to. There are ways to keep the costs down though, by hiring a van and getting help from friends and family for example or even hiring a man and van firm rather than a full removal service.
Then of course if you are purchasing your first home you may need to buy new furniture and appliances for your home which certainly mounts up. However, as tempting as it may be to buy brand new items, you could cut costs enormously by buying second hand items. It is possible to cut your costs greatly, but whatever you choose to do it is important to plan properly and keep within your budget.
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