Do you know how much it will cost you to buy a property? Call our Lonsdale Mortgages brokers on 01727 845500 for more information
Amy Kadir, Lonsdale Mortgages broker based in St Albans, Hertfordshire
Amy Kadir, Mortgage Broker, St Albans – What are the costs of buying a house?
Wednesday 12 May, 2021
Our mortgage brokers in St Albans are often asked how much it will cost to buy a new house? The cost will be different for everyone, whether you are a first-time buyer, home mover or purchasing a buy to let investment. However, it is important to know how much it will cost you as you should factor this into your purchasing decision.
There are no mortgage broker costs if you are moving home and get mortgage advice from Lonsdale Mortgages
Amy Kadir, Lonsdale Mortgages broker, St Albans, Hertfordshire said: ‘We are a ‘no fee’ broker. We will not charge you any fees for our mortgage services, except when you re-mortgage through us with your existing lender. Otherwise, we are paid commission by your provider when your mortgage completes. Call our mortgage brokers on 01727 845500 to find out how you can save time and money by organising your mortgage.’
What are the upfront costs of buying a property?
House Deposit
Although we are beginning to see banks and building societies accept lower deposits, most people still need deposits of between 5% and 20% of the purchase price. We encourage clients to save as much deposit as possible because the larger your deposit the lower your interest rate is likely to be, and the more chance you have of obtaining a mortgage, subject to mortgage affordability assessment criteria.
Stamp Duty
Remember that until 30th June 2021 no one will pay stamp duty on any property that costs below £500,000. If you are purchasing a property that costs more than £500,000 you will pay stamp duty on the excess amount over £500,000.
Between July 1st and 30th September 2021 there is no stamp duty to pay on residential properties that are purchased below £250,000. For first time buyers there is no stamp duty to pay if your property costs less than £300,000 and first-time buyers will pay a discounted stamp duty rate below £500,000.
Fees to pay
Estate Agent’s fee
This is only paid by a seller so first-time buyers don’t need to pay it. If you are selling your home through an estate agent, they will normally charge between 1% and 3% of the achieved selling price.
Surveyor’s Fee
It is important to check the property before you purchase it, so you know if there are any structural issues. The cost of these reports will vary from a basic home condition survey costing around £300 to a full structural survey costing more than £500.
Mortgage Fees
Your mortgage lender will survey your property to decide how much they are going to lend you. This report is just for the mortgage lender and will not show up structural issues or repairs that you should budget for. In addition to the mortgage valuation fee your lender may charge a booking fee normally £100- £250 and a mortgage arrangement fee which could be up to £2,000.
Legal costs
Your solicitor or licensed conveyor who performs the legal work in connection with buying and selling your property will charge legal fees that will normally vary in price from between £700-£1,600. Remember that you will also be charged VAT at 20%. Local searches that check local planning issues also have to be completed and may cost £250-300.
Electronic Transfer fee
There is a fee for transferring the mortgage money from your mortgage lender to your solicitor, it normally is £50.
Removal costs
If you want to use a removal company to move home, it will cost you more than £500. Some first-time buyers may just move themselves.
Ongoing costs after you purchase your new home
Mortgage Costs & Protection
If you use a mortgage broker for mortgage advice, they will have already reviewed your incomings and outgoings to determine how much you can borrow to purchase your new home. When you complete on your mortgage you will know exactly how much your mortgage repayments will be going forward. Remember to speak to your local mortgage advisor about taking out relevant protection policies so you can always cover your mortgage costs, whatever your circumstances.
Council Tax bills
Before you decide to purchase a property work out what council tax band the property is in so you know how much you will pay going forward.
Insurance
Your mortgage lender will make it a condition of the mortgage that you take out building’s insurance, so your home is protected against floods, fire and other problems.
Utility and other running costs
Speak with your seller so you know approximately how much their utility bills are, so you know what to budget for with gas, electricity and water. If you have leased your property you will also have to pay leaseholder costs, for example service costs and ground rent. Check with your seller how much they have to pay.
Repairs and general maintenance
You should budget for repairs as there maybe jobs that are mentioned on your survey that you want to do as soon as you move in to your new home.
As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.
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