Taking that first step on the property ladder is exciting but it can be expensive. However much you want to buy a home, making sure that you can meet all the costs associated with moving is essential. So what things should you budget for?
Your new place
Costs and fees
It’s not just your deposit and mortgage repayments that you’ll need to fund though. You may be charged an arrangement fee and valuation fee by your lender (these can often be added to the mortgage) and it is advisable to arrange your own homebuyers or structural survey to check the condition of the property. You’ll also have to fund the conveyancing costs of a solicitor, local authority search fees and land registry fees. If the property you purchase is over £125,000 then you’ll also need to pay Stamp Duty, at 1% up to £250,000 and 3% up to £500,000.
Moving in
Buildings insurance for the property will become your responsibility from the point at which contracts are exchanged and it will be a condition of your mortgage that you maintain it going forward. It is also advisable to take out contents insurance if you do not already do so as you’ll accumulate more belongings in your own place. There are a number of one-off costs that you’ll incur too. You may need to hire a van or some help to move. You may have to pay connection or disconnection fees for utilities and a phone line. There may also be decorating or home improvements that you want to do to get the house in a condition suitable for your needs.
To ensure that you can meet all the costs associated with buying your first home draw up a budget to ensure that you afford to take this step. Make sure that you include a sum of money to deal with any unexpected costs or changes and that you can cope financially if interest rates increase. With your finances in order and a little advance planning you can start your search.
This guest post was written by Kay Short. She is interested in the property market and uses www.londonmortgageadvice.co.uk for all her mortgage advice.