Buying a property is not something you do on a whim. It requires a great deal of planning, from knowing how much you can afford to spend right down to the living costs of where you’ll eventually buy. The very first place to start is by calculating how much you can borrow – this will be your mortgage and will determine what you can spend on a property. 
A mortgage is worked out on how much you can repay based on your earnings – if there are two of you, the amount you can borrow will be higher. It is possible to borrow 100% of the amount you need to buy a property, but this comes at a premium rate and it’s advisable to have some savings to use as a deposit payment. The more deposit you have, the less your mortgage payments will be, leaving you more disposable income. There are schemes to help people get on to the property ladder, such as the government’s Help to Buy scheme, which includes a loan for the deposit payment that attracts interest after five years. 

I’ve got my mortgage and deposit sorted, what other costs are there? 

Unfortunately, there are quite a few. The process of buying property involves several other parties – estate agent, mortgage brokers, local authorities, solicitors – and they all incur costs. Here’s a quick run through of what you will come across: 
1. Arrangement or Product Fee  
Payable to the mortgage lender, this is a fee for taking out the mortgage. This can vary. Some lenders will waive it to encourage you to borrow with them or it could amount to around £2000. 
2. Valuation Fee 
Once the mortgage is agreed, the lender will carry out a valuation to make sure the property is worth the price you’re paying. As above, this varies from deal to deal and could range between £0 and £1500. 
3. Survey Fee 
The lender will also request that you have a structural survey to check for defects or potential problems that could affect the value of the property. There are a number to choose from, depending on the state of the property, and again the cost varies. This survey can save you a huge amount of money in the long run so it’s worth having the most in-depth you can afford. 
4. Search Fees 
These are for searches carried out with the local authority to check if there is planning permission nearby or any other local problems which might affect a property’s future value. 
5. Land Registry Fees 
There is a fee levied by the Land Registry for a property to be transferred into a new owner’s name. The cost of this depends on the value of the house and is upwards of £200. See for more information. 
6. Legal Fees 
All legal work carried out by your solicitor – or conveyancer – incurs a cost which will be outlined when you first instruct them. This is usually a flat fee. 
7. Money Transfer Fees 
It costs money to transfer funds between all parties electronically and you’ll have to pay these charges too. 
8. Removal Fees 
If you move everything yourself you won’t have to pay a removals company but remember to factor this cost in if you’re getting a third party to help – and get a few quotes first. It will cost more if they pack for you as well. 
9. Buildings Insurance 
If you’re buying, take out buildings insurance from the day you exchange contracts. If you’re selling, you will need to remain covered until the day you complete and move out. 
10. Stamp Duty 
A tax on buying a property which depends on the value of the property. First time buyers are eligible for some relief from this. It is worked out on a scale of between 0% and 12% of the property value and is payable shortly after completion. See the website for more information.  

Next steps 

So all that to calculate before you even move in. Then there are the other costs associated with home ownership – council tax, utilities, telecoms, décor and furnishings… It really pays to be completely honest about how much you could actually afford for all homeowning outgoings before jumping in blindly and hoping for the best. There are many mortgage products available to suit all kinds of financial situations. Speak to an independent adviser in the first instance to help you find your way through. 
Your home or property may be repossessed if you do not keep up repayments on your mortgage. The information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK. Reeds Financial is a trading style of Reeds Financial Limited which is an appointed representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority. Reeds Financial Limited is registered in England and Wales no: 12656133. Registered address: Reeds Financial Limited, Innovation Centre Medway, Maidstone Road, Chatham, Kent, ME5 9FD. A fee of £499 is payable on application, for our service in relation to mortgage contracts. 
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