Never underestimate how expensive moving house is. Here’s what you’ll have to budget for when buying.
By Sarah Jagger
Mortgage Repayments
Your monthly mortgage repayment will depend on the size of the loan, the type of mortgage and the repayment period. There are big differences between deals, so always compare costs.
If you need to borrow a high percentage of the value of the property, choose a deal that doesn’t have a higher lending charge (HLC), as these can be expensive. Filter these out using comparison website Moneyfacts.
If you use a mortgage broker to arrange your mortgage, find out if there’s a fee for this service. Although some brokers get commission from the mortgage lender, some will charge their customers. The fee might be up to £350 depending on where you are in the country and the service provided. Use www.impartial.co.uk to find a broker.
You may have to pay a booking fee to the lender to reserve the mortgage funds. 'This can be anywhere between £0 and £5,000,' says Ray Boulger at mortgage broker Charcol. 'Although a nil fee usually results in a higher interest rate, and the higher the fee, the lower the interest rate. This fee would normally be added to the mortgage, whereas all other fees have to be paid out of savings,' he says.
You’ll need to hire a solicitor or licensed conveyancer to deal with the legal side of buying a property. You will pay slightly more in solicitor’s fees when buying a house compared with selling one. This reflects the additional steps a solicitor takes during the purchase process.
You will have to pay a Land Registry fee (to register ownership of the property) and search fees (to check the property legally belongs to the vendor and to carry out environmental checks) as they occur, and these will be in the region of £70-£250 although some searches will be included in the home information pack (HIP) and so paid by the vendor. However Ray Boulger at Charcol says: 'If the searches in the HIP are not more than three months old, the solicitor may say that they are acceptable but often the searches will be done again so that the purchaser and lender have them as up to date as possible. The purchaser will have to pay for these.'
The rest of the bill will have to be paid on completion. Fees vary, but will be in the region of £650-£900 plus VAT for buying a £200,000 property, so get estimates. Some solicitors may agree a fixed fee or give you a written quotation, which means they can’t charge more unless they reserve the right to do so. Some lenders offer to pay solicitor’s fees as part of the mortgage deal. Find a solicitor at The Law Society.
Buying A Property: advice and information
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