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Cost to Buy a House

Buying a house has been something most people spend their lives striving to achieve, with the biggest issues being raising a deposit and securing a mortgage. There are however many costs involved with buying a house that you may be unaware of, and it’s a good idea to understand what you need to be prepared for so you can budget as well as make a decision before making such a large commitment. Getting your foot on the property ladder is really important to give you more freedom and security, as well as being a long term investment for your future, but with it comes huge responsibilities with large costs involved as well as the initial deposit. There are also ways in which you can keep the costs down and save money.

Firstly, when you begin searching for a mortgage, many banks or mortgage brokers charge an arrangement fee for finding and setting up your mortgage. The average cost is in excess of a thousand pounds but in some cases can cost thousands. Some lenders may add it to the final mortgage where you will pay interest on this but others may require you to pay this up front. You should be able to find companies who charge lower or even zero arrangement fees but this could mean paying a higher interest rate so it is worth doing the maths and working out your options.

The next thing you need to be aware of is the cost of your home survey. It will usually be a condition of your mortgage that a survey is carried out and they will arrange this for you but you will be responsible for the cost which would be a few hundred pounds. However don’t rely solely on the home survey provided by the mortgage company as this is usually only for the purposes of a valuation, so you will then need to get an independent survey carried out which will cost you a further few hundred pounds.

When buying any kind of property you will also need to instruct a solicitor or conveyancer to carry out all of the legal aspects of the conveyancing process such as doing checks, dealing with the Land Registry and going through paperwork to name just a few things. This is likely to be one of the biggest expenses with costs in excess of £2000, although there are ways for you to reduce this cost and do things yourself but this means understanding the process and everything involved very thoroughly. It can also be very stressful and cost more in the long run if anything goes wrong.

Being prepared for buying, such as having a mortgage in place and having no chain can put you in a stronger position allowing you to negotiate with the seller, particularly if they are looking to sell house quick. If your property is worth over £125,000 you will also be responsible for stamp duty which is tax on the land and property. This amounts to a percentage of the property value and increases depending on the cost of your home. You will also need to pay the Land Registry for registering you as the new owner which can cost up to £500. You may also need to make certain changes to the deeds such as boundary information which could cost extra too, so it is important to be prepared for that.

by Cormac Henderson

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