When buying a house, there is more to pay for than just the house itself. These can add up, and if you haven’t taken them into consideration prior to your purchase, then you might see yourself going over your budget or being surprised by the additional costs. Here are some hidden fees when buying a house.
Stamp duty is a form of tax. It needs to be paid when purchasing any house that will cost more than £125,000. In order to determine the exact cost of the stamp duty, you should use an online calculator. This money is paid to the government, and unless the value of the house you are buying is less than the threshold, then you cannot avoid it. Stamp duty must be paid within the first 30 days of purchasing the house otherwise you will get yourself into legal issues. You need to make sure to add the cost of stamp duty to the overall cost of the house as it can easily be in the thousands depending on the value of the property. Just make sure to add it to your list of things to pay and do not miss the 30-day deadline.
At the Autumn Budget 2017, the Chancellor of the Exchequer announced relief from Stamp Duty for first time buyers. The relief applies from 22 November 2017 to purchases of residential property for £500,000 or less, provided the purchaser intends to occupy the property as their only or main residence.
Conveyancing is the legal act of transferring the property ownership from one person to another. The cost of this will differ depending on which solicitor you choose and the house that you are buying. You should work out your conveyancing fees in advance so that you are prepared and can add their cost to your overall budget. It is one of those fees that you might not have realised you needed to pay before buying a house, but it is one that you need to be prepared for so that the cost doesn’t surprise you. It is unavoidable and is just another part of the house buying process.
You might think that the monthly cost of the mortgage and the initial deposit are the only things that you need to worry about when it comes to having a mortgage. Unfortunately, you would be wrong. You will also need to pay a booking fee, arrangement fee and a mortgage valuation fee. All of these together can exceed £2000, so you need to make sure that you have calculated exactly how much extra your mortgage is going to cost you on top of the deposit and monthly payments.
Understanding these hidden costs early on will help you avoid going into debt or being unable to afford your dream home. It will help you have a far more exact budget, and you will be fully prepared for every step of the house buying process. The last thing you want to do is have paid for everything except the mortgage costs and then realise that you don’t have enough to cover the arrangement fee and for you to struggle to pay. Planning everything in advance will be the best course of action every time. So it doesn’t matter if this is your first house or you have not gone through the process in a while, don’t get caught out by the hidden costs.