Hidden charges: Things you need to budget before buying a house
Once you’ve gone to all the trouble to save the deposit to find your first home, you’ll either be buying something you know needs renovation or a house that is ready to go. It’s the ready to go house that comes with risks, hidden maintenance costs and things you might not have budgeted in to your original amount. Try not to get too worried about looking into the properties inner core for problems, but you need to be sensible. You also need to factor in costs of using a solicitor, a mortgage adviser and any other extra services you plan to use in buying your property.
You can get a really good understanding of surveys through impartial advice websites but information alone might not help you with your individual situation. The temptation can be to go for the biggest survey you can find to check your house isn’t going to cost you too much in maintenance as soon as you move in. This is sensible and can also lower your mortgage in the long run if it turns out the valuation is lower that expected. However, if it reveals your house is in tiptop condition then you’ve spent around £800 on peace of mind. If the property is old that £800 could end up saving you more money than you think.
Say, for instance, the survey finds that your house is going to need to be re pointed in the near future, you could get a quote for the work required – let’s say £3,000 – and deduct that from the offer you make on the property. That helps to lower your mortgage. So, the conundrum is clear – spend and you could save or spend and just have peace of mind; either way, both results aren’t that bad and more lenders allow you to add the cost of valuation onto your mortgage anyway and pay it off over time.
Obviously this is something you actually need to buy a house. You can’t do it alone. However, you should ask your solicitor to provide a rough projected cost for their services as soon as you begin the conveyance process. You can also ask them to outline any potential problems that could delay the process costing you more money just so you know what to look out for.
This is something that everyone has to pay for when they buy a house – it is paid on land and property transaction in the UK. The rate you’ll pay the tax at varies based on the price of the property and whether it is a commercial or residential building. The Stamp Duty threshold is £125,000 for residential properties and £150,000 for non-residential land and properties. Threshold means below these prices you don’t have to pay the tax. Usually your solicitor will file your return and pay the tax on your behalf on the day of completion and add the amount to their fees so make sure you look into this ahead of billing.