Hidden Cost you Need to Consider When Buying a House
Purchasing a house is one of the most significant financial invest- ments that you will make in your lifetime. That's why it is so im- portant to be aware of all the costs that come with a purchase of this magnitude. Whether you're buying a house as an income property to rent, to ren- ovate and resell, or to live in, there are a myriad of costs associated with the purchase of a home that you may not be aware of. In this ar- ticle we will be discussing not only common additional costs that run beyond the purchase price of your home, but also several costs that you may not have yet considered. Legal Fees Legal Fees There are a myriad of legal ins and outs that come with the purchase of a house, most of which require a solicitor to handle. This obviously comes with legal fees that will need to be paid before the date of the purchase. The costs of these fees vary from house to house, and are based mainly on your home’s purchase price.
Surveys Surveys Surveys are one of the more costly fees that come with a house purchase, not so much because of the cost of the survey itself (they usually run anywhere from £400 to £700), but the amount of times that this will have to be done. Surveys are done before the actually purchase is complete, so often you are paying for a survey on a property that you may not end up buying. To be safe, many home buying experts suggest that you budget for two or three surveys (roughly £2000.00). Mortgage Arrangement Mortgage Arrangement Fee Fee A mortgage arrangement fee is a cost that is billed to you by your lender. Although this cost varies from lender to lender, it typically runs around £1000.00. In many cases this is a non-refundable fee that you may still be responsible for even if the purchase of the house does not go through.
Removal Costs Removal Costs When most people think of removal costs associated with a home purchase, they normally think of moving from their existing home in- to their new home. But what about removing items that have been left in your new house by the existing owners? Ideally, your new home will be “move in ready” the day you exchange, but unfortunately this is not always the case. Often, previous owners leave their old furniture, or small equipment, either in the house it- self, or somewhere on the property- and unless you can find a use for these items, you will more than likely need to contact a moving com- pany to have these items removed. Stamp Duty Stamp Duty If the purchase price of your home exceeds £125,000 you will have to pay a stamp duty land tax on the purchase price of the house. If you're not sure about how much this will cost, there are plenty of online stamp duty calculators that can help you determine how much you can expect to pay.
Valuation Valuation Before a house can be purchased it must first undergo a valuation. This is a fee that your lender will charge to not only verify that the property exists, but also that it offers sufficient security for the loan (meaning that the bank can recoup its costs by way of selling the property should the loan go into default). The cost of this service var- ies, but generally is in the vicinity of around £300. Repairs & Repairs & Maintenance Maintenance Even if your new house passes an evaluation from a home inspector, it will more than likely still need a few minor repairs and upgrades such as; touching up flaking paint spots, or fixing leaky plumbing. And although the costs of these jobs are inexpensive individually, the vari- ous costs on a whole can often exceed what you have budgeted for. Many housing experts suggest that whatever budget you have set aside for repairs and maintenance should be doubled to ensure that you do not go over the amount that you are willing to spend. It is also important to note that the costliest of repairs are often located where we cannot see them.
Furniture Furniture It is probable that you will want to have at least one or two new piec- es of furniture for your new home. This applies not only to purchasing a larger home, but a smaller home as well. If you're upgrading to a larger home you will need to buy a few extra pieces of furniture to ac- commodate the extra living space. If on the other hand you're down- grading, you may need to buy a few smaller pieces of furniture (such as a smaller dining table) that will fit better in a smaller space. These are also costs that you will want to budget for beforehand. Taking all these costs into account before you begin looking to buy will help to make the process much less stressful for home buyers.
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