First-time home buyers need to be extra vigilant when it comes to home loans and their accompanying fees. Just because you’re new to this environment does not mean you should remain clueless.
Buying a home is a costly endeavour, and it is the single largest financial transaction in a lot of people’s lives. You need to know every possible cost included in your loan to prepare a sufficient budget.
In the sections below, you will find out all of the upfront costs that may occur while purchasing your first house. Before that, familiarise yourself first with the house prices you may encounter.
Typical House Prices
Since the outbreak of the pandemic, house values have risen dramatically. The average UK property price is £270,708 as of November 2021.
House costs vary a lot depending on where you live, and they fluctuate regularly. If you’re seeking to buy, it’s vital to keep an eye on what’s going on. You’ll need to study to figure out what you’ll need to budget for. Doing so might make you discover a bargain in your ideal neighbourhood if you look hard enough.
The upfront fees that you must factor into your budget are listed below.
Set Aside Money for Your Deposit
The deposit is the sum you put down as a down payment on your home. A decent deposit quantity is required to access the full range of offerings. The best deposit is usually 40 per cent, which will get you some of the best rates from mortgage companies.
You Need to Pay a Land Tax
You need to pay Stamp Duty Land Tax (SDLT) if your house costs more than £125,000 in England. If you’re a first-time buyer, you won’t have to pay any SDLT on property worth £300,000. Because it is calculated as a percentage of the purchase price, the amount you pay is determined by the value of your property.
There’s a Valuation Fee
The mortgage lender will charge you this fee in order to appraise the value of your home and decide how much they are willing to lend you. The price ranges from £150 to £1,500, depending on the value. However, certain lenders may not charge, depending on the type of mortgage.
You Have to Pay Surveyor’s Fees to Ensure the Home’s Safe
You’ve located the house you like, but you want to make sure it’s in good shape before making a purchase. You might not be aware of the costly work that needs to be done around the house if you don’t conduct a survey. The surveyor’s fee may vary depending on the size and scope of the property you plan to buy.
Prepare for Legal Fees and Broker Fees
To complete all of the legal procedures involved in purchasing a property, you will need a solicitor or a licensed conveyancer who will also conduct searches in the area.
Brokers operate as a middleman between the customer and the lender. They typically advise on the products of a variety of lenders in the market, saving the customer the time and effort of visiting many lenders. They might levy a surcharge.
Conclusion
Other customary fees that apply to other forms of loans and deposits are the same for house loans. Examples of these fees are document retrieval charges and cheque bounce charges.
If you decide not to take a loan after it has been approved, check for loan cancellation fees that are usually a percentage of the loan amount. A penalty may also be imposed if you fail to submit needed documents or file your records on time.
This article is for information only and should not be seen as advice or a recommendation to act. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.
If you’re looking for excellent first-time home buyer programs in Chester, A Move Brokers has great home loan options available. We offer a wide range of mortgage products. Contact us today to get the best deal that suits your particular needs!