Planning on buying a home? The deposit isn’t all you have to save up for. As many first time home buyers discover, the process involves all kinds of hidden extra costs. Together these cost several thousands, pushing many people beyond their budget. Here are just some of the hidden costs to look out for so you can budget accordingly.
Before buying a property, it’s always worth hiring a surveyor to take a look. Surveyors can check the condition of a property and look out for any signs of damage that could result in costly repairs in the future. All in all, it could save you money in the long run by possibly preventing you from buying a property that’s cursed with hidden faults. Surveys can cost anything from £200 to £700 depending on the size of the property and thoroughness that you want.
This is often confused with a survey but is very different – a mortgage company will often send someone around to similarly check the property for faults, however this survey is often less detailed and for the benefit of your mortgage lender so that they can determine whether they should be loaning you that amount of money. Surveys can also vary in price depending on the size of the property.
A conveyancer is worth hiring to handle the legal paperwork when exchanging ownership of the property from one owner to another. Many general law firms offer conveyancing as a service, although you may prefer to hire a specialist conveyancer. Conveyancing also varies widely in price with some solicitors charging as low as £200 whilst others may charge well over £800.
There are a myriad of agency fees to watch out for. The most basic is a commission charge, that is charged to the seller, however a number of agencies have started also charging buyers various sneaky service fees. This guide on Estate Agent Fees And Contracts is worth reading so that you know exactly which fees you should be paying.
If you’ve found a home you want to buy, but are still waiting for your previous home to be sold or for a mortgage loan to come through, it could be worth taking out a bridging loan in the meantime. These are short term loans that can be paid back once the money you’re owed comes through, allowing you to buy there and then without having to wait for funds to come through. Interest rates on these loans can vary so it’s worth shopping around. This guide to the Top 10 Finance Bridging Loans could be worth reading. You certainly don’t want to be taking out a regular loan in these cases.
First month’s mortgage
You may also have to pay the first mortgage instalment upfront, depending on when you seal the purchase. This could be extra money to budget in – you don’t want to be missing your first mortgage repayment instalment. Check this information before you commit to buying your home.