It can be costlier to purchase a new home than what you can expect. You can come across many hidden expenses that can add over 10% to your final costs, and you should know about the same and take it into your budget considerations. In case this is your first home purchase after having been in rental units for a long time, the additional expenses of maintenance can be very shocking. Find out about the hidden fees involved before buying a new house.
You should pay for a mortgage deposit and the monthly expenses following it. A mortgage valuation should be conducted to ensure that the property offers enough security for the home loan. Generally, you are expected to pay for the same although a few mortgage agencies offer to cover these expenses today in order to attract new clients. The mortgage arrangement fees frequently charged by brokers or mortgage agencies can be up to 1% of your mortgage, and can be a hefty amount.
Surveys and Conveyancing
Valuations or surveys can be quite costly, and can be more than 1,000 pounds in some cases based on your survey type and property value. The costs of Conveyancing, a legal procedure involved in property purchase that includes Land registry and different types of search fees, can be in the range of 800 – 1,500 pounds and even higher for leasehold properties.
It could make you several thousand pounds poorer, as up to 7% of the cost of home purchase. SDLT (Stamp Duty Land Tax) is the tax that you pay while buying a new home. Remember that it is you and not the seller has to bear the stamp duty costs. The cost is calculated exactly similar to how income taxes tend to work.
You will need to show a copy of Buildings Insurance to your lender for your new house. Other than this, you have to obtain Contents Insurance for keeping other items in your new home protected. The cost can be as much as 1,000 pounds every year, based on what you are actually insuring, your profession, types of door locks, rebuilding expenses, building material for your home etc.
In case you are going to reside in a serviced apartment, you will have to pay a regular service charge. In many cities and towns, you need to pay a yearly fee for keeping your vehicle parked on the street and for purchasing extra permits for guests or visitors to your home.