When you decide it’s time to sell up and move house, you’d be right to be a little anxious about the financial side of things. Unfortunately, buying a house nearly always costs more money than we expect it to and you can never be too prepared. So, if you’ve decided the time is right and you’re committed to buying a home, then you need to spend a little time working out the financial implications so you can work out exactly how much the whole process is going to cost.

Mortgage

Probably one of the first things you’ll think about is the cost of a new mortgage. You will need to know how much you’re likely to be allowed to borrow before you start viewing houses. In fact, some estate agents now insist on seeing your Mortgage Agreement in Principle before they’ll allow you to view a property.  Having an agreement in principle shows that you are a serious buyer and you will have the funds to actually buy the property if you decide to put an offer in.

For any mortgage, you need to be sure that you can comfortably afford to make the repayments each month. Don’t be tempted to accept a high mortgage if it’s going to mean you stretch yourself financially. You can use a mortgage calculator to help you work out how much your mortgage is likely to cost to repay.

Stamp Duty

In the UK, we have to pay stamp duty on properties over a certain price. This has been £125,000 until recently and is currently £500,000 until March 2021. This has been increased to encourage the housing market to get moving again following a huge decrease in sales during the Covid-19 lockdown.

If you can afford to move and you’re looking at houses worth less than £500,000 then you can save a large sum of money by moving before next March.

Legal Fees

You will usually have to pay a solicitor to undertake all of the legal paperwork for you when you buy or sell a house.  Fees are typically £850-£1200 so you definitely need to factor this in!

Estate Agent Fees

Estate Agents typically charge up to 3% of the sale price – this is paid by the seller, so if you’re a first time buyer you won’t need to worry about this one.

Valuation Fee

Mortgage lenders won’t just accept that the sale price is a fair price, they will want to do a valuation of the property before they give you a mortgage. Not every lender will charge for this, but it can cost anything from £150 right up to £1,500 depending on the value of the property, so it’s worth knowing whether you will have to pay!

Survey Fee

Before you buy a property, you need to have a full survey completed by a qualified surveyor. Prices vary drastically but it’s important to have a thorough job here as it could save you a lot of money on property repairs in the future.

The main point here is that buying a property will probably cost you more than you expect, so make sure you have a little extra put away to cover any unexpected costs! But, the main points have been highlighted here to give you some idea. Happy house hunting!