When you do your sums, you’ll need to take into account the full costs of buying a house and the fees you pay when getting a mortgage. Here we’ve rounded up the main costs to consider when buying a house - you should put some money to one side to cover these if you can.
Typical fees include:
- Arrangement fee - (also known as a booking fee or completion fee) - this is the admin cost to set up the mortgage loan. It can often be added to the mortgage so you don’t typically pay it right away.
- Valuation fee - this pays for an inspection of your new home and gives an estimated value of how much the property is worth. You need to pay this upfront as part of the mortgage application process.
- Survey - this is a thorough check of a home to spot things such as damp or structural damage. It’s optional but advisable, particularly if you’re buying an older property. You will typically pay this before you move into your new home.
- Legal fees - these are paid to your solicitor and covers the legal work associated with buying a home, such as conveyancing (the legal transfer of a property from one person to another). These are paid towards the end of the process when you have moved in - you’ll be sent an invoice from your solicitor.
- Stamp duty - this is the tax paid to the government when buying a residential property or piece of land (known officially as Stamp Duty Land Tax or SDLT). This is paid upfront while you’re in the process of buying the house although sometimes it can be added to the invoice for your legal fees from your solicitor.
- Moving fees - including the costs for a removal company or van hire to help you move your belongings into your new home. These are usually paid in advance of you moving or if not, immediately afterwards.
In addition, buyers are now being encouraged to consider the cost of making green improvements to their property over the next 10 years. According to a report from Rightmove, you can try and negotiate asking price discounts on homes with poor energy ratings to compensate for this.
By contrast, sellers who have already made changes that have improved the EPC rating (Energy Performance Certificate) of their home are adding as much as 16% to the price when they come to sell.
