Costs and fees to consider when you’re buying a home
Buying a home can be an exciting journey, but it’s important to be aware of the fees and costs involved, so that you can budget your finances accordingly. Here are some key things to consider.
A mortgage is a loan that you pay back in instalments. It usually includes an interest charge on the repayments. There are many types of mortgages available. Some lenders may charge you a mortgage arrangement fee, which you’ll need to pay upfront. If you’re using a broker, they may also charge you a flat rate or commission fee for their services.
If you’ve got a mortgage, you’ll likely have to place a down payment, called a deposit, to show the lender that you’re serious about taking out the home loan. Here are some ways to save for a mortgage deposit.
You’ll also have to pay for a valuation of the property you’re purchasing. This proves to the lender that your property exists, and establishes its value, for example, in comparison with similar properties in the area.
You’ll also have to pay for a survey of the property. This lists its key features, including any defects or required maintenance or repairs.
Legal and conveyancing fees
Buying a home involves legal paperwork. You’ll have to hire a solicitor or conveyancer to help sort out contracts, conduct local authority searches, deal with Land Registry and transfer the funds for the property purchase. These may incur additional fees, like for local authority searches.
You may need to hire movers to help you transfer your belongings to your new home, or, if you’re doing it yourself, you may still find that there are costs to consider. These can range from the purchasing of boxes to pack your things in, to the hiring of a van.
Once you own your new home, you’ll still have ongoing costs to consider. Mortgage repayments aside, these can include:
- leasehold costs
- home insurance
- maintenance and repairs
If you’re planning on applying for a mortgage, you may want to check your Equifax Credit Report & Score beforehand – it’s free for the first 30 days, then £7.95 monthly. The credit report shows you your credit history, giving you the chance to spot any inaccuracies on it, whereas the score gives you an indication of how creditworthy lenders may find you.
- What is a commercial mortgage
- What is a mortgage broker?
- How much can I borrow for a mortgage?
- What is a tracker mortgage?
- Getting a second mortgage and buying a second home
- What does freehold mean?
- What credit score is needed for a mortgage?
- What is a 95% mortgage?
- Stamp duty on new builds
- Stamp duty on second homes and buy-to-let properties
- Stamp duty for first-time buyers
- Stamp Duty Land Tax (SDLT) explained
- What to do if you’ve been rejected for a mortgage
- What is a mortgage?
- Can you apply for a mortgage with credit card debt?
- What to ask estate agents when purchasing a property
- Can I apply for a mortgage in retirement?
- What is porting a mortgage?
- What is a joint mortgage?
- Offset mortgages explained
- What is a mortgage in principle?
- What’s a mortgage deposit?
- Purchasing property with friends
- Getting a no deposit mortgage with bad credit
- Do you have Right to Buy on your council home?
- Saving for a mortgage deposit
- What is a mortgage interview?
- How do credit scores affect mortgages?
- What to consider when applying for a mortgage if you’re self-employed
- Buying property – what is conveyancing?
- Buying a property – what is gazumping?
- Types of home improvement loans
- What happens to a mortgage after death?
- Getting credit-ready before applying for a mortgage
- How do mortgage applications work?
- Selling property – what to ask estate agents
- Selling property – estate agents vs doing it yourself
- Buying a leasehold property
- Help to Buy: equity loan
- London Help to Buy
- Mortgages for self build and custom build homes
- Help to Buy: Shared Ownership
- What is a Help to Buy: ISA?
- Resources for first-time buyers
- Buy-to-let mortgages explained
- What is remortgaging?
- How mortgage repayments work
- Understanding Mortgages
- Types of Mortgages
- Mortgage rates & decision
- Homebuyer's guide