It’s not just the asking price you have to consider when buying a new home; there are a number of different costs when buying and selling, so it’s important you know about these in advance, and budget for them:
Upfront fees
The biggest outgoing you’ll have when buying a new home is your deposit. This can be anything from 5% of the cost of your new home upwards. The bigger your deposit is in the first place, the better mortgage deals you’ll get access to. Also, your mortgage repayments may be lower, your interest rate will probably be lower and even the years you will take to pay it back could be fewer.
Other major upfront costs include solicitor’s fees, home report costs and Lands and Buildings Transaction Tax (LBTT – used to be called stamp duty).
There is also the cost of hiring a removal firm to help you transport all your precious things to your new abode. As with all of the costs involved in buying and selling, this can vary significantly, so shop around before you commit.
Mortgage fees
No lender will give you a mortgage without carrying out an affordability check so – in theory at least – you will have no problem making the monthly repayments. However, it’s worth doing your own sums to make sure you aren’t over-stretching yourself.
There are fees associated with setting up your mortgage – these can include an arrangement fee, and a valuation fee. Some mortgage deals come with these fees as part of the deal, so take this into consideration when shopping for the best deal.
Ongoing costs
Before you commit to buying a new home, you should investigate the monthly costs involved in running the new property, as these could be quite different from your current home. Home insurance will need to be rearranged, and even car insurance can be affected by a change in postcode. Council tax may also be different so don’t forget to check the new property’s band.
If you’ve bought a fixer-upper you’ll need to take into consideration the cost of any work that needs done to the property and ongoing maintenance and repairs.
If you need help with arranging a mortgage, get in touch with our independent advisors today. Or view our other blogs with more free help for saving towards your new home.
