Buying property is a dream come true for many, but most don't understand that there are hidden fees and that buying that perfect home may turn out to be more expensive than originally anticipated. There are certain fees and costs which are unavoidable, but which need to be understood before the purchase is considered - at times, these hidden costs can amount to about 10% of the total bill. Why is it important to know? Because if you are not prepared for it, the first years of ownership can turn out to be very hard years indeed. Here are the top hidden fees and expenses you should know about when purchasing property.
Expenses and fees
There may be more, there may be less - this all depends on the kind of deal you can make and how it can be bundled into one package. However, here's what you should expect:
- Conveyancing. These are the fees you will incur for legal transfer of ownership, registration, and so on. The amount usually depends on what you pay for the property, but it can range from £700 to £1500.
- Stamp duty. This is the real clincher; this can cost up to 7% of the total cost of the house - it's a major expense and many are caught by surprise in this regard.
- Surveys and valuations. You may be buying property for a certain cost, but price doesn't equal value. You will want to have a survey done to ensure you understand whether or not there's any problem with the property. This could be £1000 or more.
- Mortgage fees. This includes mortgage arrangement fees by brokers, indemnity fees in case you have a high loan-to-value ratio, and broker fees. All of this can add up to 1% of your mortgage or more.
- Estate agents. Usually the seller takes care of this - but not always. Get informed.
- Removals. Check with removal services; if you have a lot of stuff, it can get expensive.
- Renovation and new furniture. Although not always immediately necessary, you might want it in the future, so keep it in mind.
Aside from the hidden costs, you should also be aware of the costs when you own the property - some of these are forgotten or not anticipated by new homeowners. Monthly bills tend to go up if your property is larger than the one you used to live in before; there's the council tax and insurance to consider; sometimes there's parking and service charges, and then there's the maintenance to think of. Buying property is a great idea - but only if you are fully prepared and have calculated all expenses well in advance. However, to help you properly prepare, you can always get the right assistance from a mortgage advisor in Colchester and nearby areas, especially one from Flagstone.co.uk.
