Articles > How Much Does It Cost To Buy A Home
(29 Aug 2007)
There are many things that you need to consider when budgeting for a properpty purchase. There is usually a product fee from the bank or building society (normally called a booking fee or arrangement fee), which usually comes to between £500 - £1500.
This is simply an administrative fee for processing the mortgage applcaition. Many lenders allow you to add this fee to the main loan, thereby reducing short-term cash requirements.
Survey Fee.
There will be a valuation or survey fee. Basic valuations should be £300 - £500, while a more thorough Home Buyer’s survey will be £600 - £800, depending on the price of the property. These fees must always be paid up front.
Legal fees.
These are fees payable to your solicitor or conveyancer for acting on your behalf. Also included below are costs that your soclitior will incur on your helaf. You ill have to reimburse them for these.
Solicitors normally work on a sliding commission depending on the price of the property. A good solicitor should be no more than £1000 + VAT, but again this will depend on the price of the property.
Bear in mind that cheap is not always best. Ask around for personal recommendations. Once you find one you like, don't be afraid to ask for a discount.
Disbursements.
These refer to costs that solicitors incur on your behalf. These come to around £400 for searches with the local authority and the land registry.
Stamp Duty.
Actually, this also is a disbursement, but because it is so large, deserves its own category.
Properties from £0 to £125,000 incur no stamp duty. From £125,000 to £250,000 it is 1% of the purchase price, from £250,000 to £500,000, it is 3%. Anything over that is 4%.
Important to note that this tax is not staggered like income tax. If the property costs £250,000, the tax is £2,500. If the property costs £250,001, the tax is £7,500. If you found this article interesting or useful please share it with others!