As if getting the money for a deposit wasn't enough, there are also
the one off extra costs to consider. And they're not cheap. What do you
think the extras are for a first time buyer? £1 000? Higher. 2 000?
Higher. £5 000? Try again.
Home.co.uk and
Find Law
have guides to the extra costs we are likely to come across when we
actually get around to getting a mortgage. I highly recommend that you visit both these Home.co.uk and Find Law as I found them invaluable for our savings calculations.
Here is a break-down of what
we can expect (let's work off the cheaper property price for us: £175
000):
Arrangement Fee
This is charged by the
banks to cover the cost of setting up the mortgage. Some lenders waive
this fee but Find Law says £500 - £1000. Also, it seems like the smaller
your deposit is, the higher the fee is.
Lender's Valuation (Basic Valuation)
All banks require a valuation of the property to check that it is
actually worth the price it was sold for but the cost of the valuation
completely depends on the value of the property. For example, Home.co.uk
allows ca £125 for a property worth £50,000, £165 for a £100,000 house
and so on. Find Law suggests £100 - £300 dependent on the property.
Homebuyer's Report
The Homebuyer's Report is a property survey which costs between £100 and £500.
Building Survey/Structural Survey
The more comprehensive Building Survey/Structural Survey can cost
anything up to £1,000 plus VAT, depending on the value and size of the
property.
Legal/Conveyancing Fees
Yup, you need a solicitor. There doesn't seem to be a standard fee but
but Find Law seems to suggest that it could be anywhere from £200 -
£1500 and Home.co.uk are suggesting 0.5% of the property price. You also
need to pay for the bank's solicitor. So you are paying for 2
solicitors and their paperwork...
MIG Fees (mortgage indemnity guarantee)
Some banks
charge an insurance premium if you are borrowing more than 75% of the
propert price. Others don't charge one at all, and some charge if you
borrow more than 80-90%.
This is in case you default on your mortgage
repayments and the bank can't recover its money.
Costs vary between banks but Home.co.uk reckons typical MIG premiums are:
- 4 per cent of the amount borrowed above 75 per cent on a loan of up to 90 per cent of the purchase price
- 6 per cent of the amount borrowed above 75 per cent on a loan of up to 90-95 per cent of the purchase price
- 8 per cent of the amount borrowed above 75 per cent on a loan of up to 95-100 per cent of the purchase price
Find Law reckons you should expect £1 500 per £100 000 of the property value.
Stamp Duty
Stamp duty is a tax charged for properties above £125,000, and few
properties in this area fall below that magic amount. Up until 24th
March 2012 first time buyers didn't have to pay stamp duty, but now we
do and it's not cheap:
| Propery Price (£) | Stamp Duty (% of property price) |
| up to £125 000 | 0% |
| £125 000 - £250 000 | 1% |
| £250 000 - £500 000 | 3% |
| over £500 000 | 4% |
S
tamp Duty Land Tax Exemption in 'Disadvantaged Areas'
If the government has designated the area you want to move to as 'disadvantaged', you don't pay any Stamp Duty Land Tax if
the property price is less than £150,000. Both the 'disadvantaged' consept and the price pretty much rules out most of the south-east.
Land Registry Fee
The Land Registry charges a
fee for transferring the register to the new property owner. How much this fee is depends on the property price. From 22 October 2012 the fees are as follows:
| Price | Fee | Reduced Fee(for a voluntery first registration) |
| up to £50,000 | £40 | £30 |
| £50,001 - £80,000 | £60 | £50 |
| £80,001 - £100,000 | £120 | £90 |
| £100,001 - £200,000 | £190 | £140 |
| £200,001 - £500,000 | £270 | £200 |
| £500,001 - £1,000,000 | £540 | £400 |
| £1,000,001 and over | £910 | £680 |
You can find documentation and forms at the
Land Registry website.
Local Authority Search Fees
Your solicitor will do local searches to check that there are no future problems or issues like planning permission
on neighbouring properties or plans for new roads nearby. Allow at least
£60, or more in London boroughs.
More Fees and Disbursements
Then there is index map, commons, the coal authority, land charge,
company searches, bank transfer fees. Home.co.uk reckons about £70 for an
average house purchase.
House-hunting Expenses
House hunting can be expensive, expesially if you are planning to move far. You may need to grab food while you are out, pay petrol or other travel costs, hotels and phone bills. Of course, if you want to move down the road, the costs will be minimal. We've calculated that the petrol to get us to from home to the area we want to move to will cost us about £20 for three return journeys, so we're guessing £100.
Removal Fees
Ah, yes. Then there is the moving itself. Remember, that by the time you get to this point you will already have shelled out a fair bit of cash, so it's worth putting on the list in case you forget about it. Of course, you may be able to do all the moving in your own or friends cars, in which case: yay! But if you can't that you have two options available: Rent a van (and pay for van hire, insurance and petrol) or get someone to do it all for you which will cost more, but be easier. Check with some companies to find the best deal.
Money Saving Expert has some good ideas about how much is can be and looking at the quotes in their posts (£220 - £1100!) we're probably going to hire a van and do it ourselves.
All in all a property costing £175 000 with a 95% mortgage is going to cost about £6500. That's
on top of the deposit. That's almost the same as the deposit!
And then there is:
- Buildings and contents insurance
- Disconnection and reconnection of water, gas, electricity, telephone, etc.
- Mail redirection
- Change of address notice
- Furniture
- and so on, and so on, and so on...