Six costs to consider when buying a property
Buying a property is an exciting undertaking and one for which you need to be fully prepared. Having the appropriate budget in place is vital, which means understanding that the costs involved when you acquire a property go beyond simply having a deposit and getting a mortgage.
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1. The deposit
To get the process started, you will obviously need a deposit for the property. The size of the deposit will differ according to which mortgage lender you go with and which deal you are on; however, in general, a larger deposit will give the lender confidence and make the transaction easier.
2. Mortgage fees
When you take out a mortgage, there will be fees involved. It is a good idea to go through the fine print of any mortgage offer to find out which fees are payable at the start and which will be applied as the mortgage continues. A low rate may sometimes mean higher fees.
3. Stamp duty
It is also necessary to calculate the stamp duty, which is a form of land tax paid to the government. There is no getting out of paying this; however, rates vary depending on the value of the property and if you are a first-time buyer.
4. Survey
For peace of mind, you will probably want a home buyers survey. Some mortgage lenders insist on a home buyers survey; either way, it is an excellent idea to get expert information on the condition of the property and be fully informed as to whether there are likely to be any major issues further down the line.
5. Conveyancing
Money must also be put aside for conveyancing. This encompasses all the necessary legal aspects of buying property, such as requesting and checking local searches and amending property titles and deeds. Some conveyancers will give you a quote that means they can add items as they arise, while others will give a fixed cost for completing the work. Whichever way you decide to go, it is a good idea to compare quotes from companies such as Sam Conveyancing to see what they offer and how their terms differ.
6. After completion
There could be sundry other costs after contracts have been exchanged and completion has taken place, such as paying a removal company or hiring a van to load up your furniture and personal items and take them to your new home.
If you are not going to live in the property, there may also be costs involved for checking that the gas and electricity supplies are safe for others to use. There could be fees for service charges or insurance along with your monthly mortgage payments.
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