By Sumona
When buying your first home, there are a lot of costs to keep in mind.
In this post, Your Debt Expert shares some of the hidden costs that can add up quickly for first-time home buyers.
Alongside helping struggling individuals get their finances back on track, Your Debt Expert provides information and advice on everything from mortgages and council tax to how do trust deeds work?
Here are seven of the most common hidden costs associated with buying a home.
1. Stamp Duty
For first-time home buyers, stamp duty can be a significant expense. The tax is charged on properties that are purchased for over a certain value, and first-time buyers are exempt from stamp duty on the first £300,000 of their home.
However, this exemption only applies to the purchase price of the property, and not to any additional costs such as solicitors’ fees or mortgage lender fees.
As a result, first-time buyers need to factor in the cost of stamp duty when budgeting for their new home.
Nevertheless, the savings that first-time buyers can make on stamp duty can be significant, and it is worth taking the time to compare the cost of different properties before making a final decision.
2. Mortgage Lender Fees
Mortgage lender fees can vary significantly from one lender to another, and first-time buyers need to factor in these costs when budgeting for their new home.
Many lenders will charge an arrangement fee for their mortgage products, and this can range from a few hundred pounds to several thousand pounds.
In addition, some lenders will also charge a valuation fee and/or a survey fee. As a result, it is important for first-time buyers to compare the total cost of different mortgage products before making a final decision.
3. Solicitor’s Fees
Solicitor’s fees can vary depending on the complexity of the transaction, but first-time buyers can expect to pay around £500-£1,000 in solicitor’s fees.
In addition, first-time buyers will also need to pay for a number of other services such as searches (which can cost around £100) and Land Registry fees (which can cost around £30).
As a result, first-time buyers need to factor in the cost of solicitors’ fees when budgeting for their new home.
4. Surveyor’s Fees
A survey is an important part of the home buying process, and first-time buyers need to factor in the cost of a survey when budgeting for their new home.
The cost of a survey will vary depending on the size and location of the property, but first-time buyers can expect to pay around £250-£500 for a basic survey.
However, first-time buyers should bear in mind that the cost of a more comprehensive survey (which is recommended for properties that are older or in need of repair) can be significantly higher.
5. Removal Costs
First-time buyers also need to factor in the cost of moving home when budgeting for their new property. The cost of hiring a professional removal company can vary depending on the size and distance of the move, but first-time buyers can expect to pay around £500-£1,000 for a basic removal service.
In addition, first-time buyers will also need to pay for the cost of packing materials (such as boxes and bubble wrap) and storage (if necessary). As a result, first-time buyers need to factor in the cost of moving home when budgeting for their new property.
6. Contents Insurance
Contents insurance is an important consideration for all homebuyers, but first-time buyers need to be aware that the cost of contents insurance can vary significantly from one insurer to another.
As a result, first-time buyers need to compare the cost of different contents insurance policies before making a final decision.
In addition, first-time buyers should also bear in mind that the cost of content insurance can increase if they have items of high value in their home (such as jewelry or artwork).
7. Buildings Insurance
Buildings insurance is a legal requirement for all homebuyers, and first-time buyers need to factor in the cost of buildings insurance when budgeting for their new home.
The cost of buildings insurance can vary depending on the size and location of the property, but first-time buyers can expect to pay around £100-£200 per year for a basic building insurance policy.
However, first-time buyers should bear in mind that the cost of buildings insurance can increase if the property is located in an area at high risk of flooding or other natural disasters.
First-time buyers need to be aware of all the potential hidden costs when budgeting for their new home. By taking into account all of the fees and charges involved, first-time buyers can avoid any last-minute surprises and plan their finances more effectively.
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