What fees to expect when buying a house?

[elishas]

Hello lovely people!

So my Husband and I have started viewing properties with the hope of buying our first home in the next few months. We have a deposit more or less ready in a month or so, and I wanted to know a rough estimate of all the costs that could crop up along the way.....

Have you any tips to save money? I know the biggest cost will be solicitors fees, and also a full (surveyor?) type search on the property is advised, what else am I to expect?

I know it differs from each individual person etc but I know nothing about mortgages or legal fees and want to be a bit savvy in saving money....

Any advice/tips are appreciate,
thanks in advance

[FlamingParrot]

Re: What fees to expect when buying a house?

The lender may charge you a number of fees when you obtain a mortgage, which vary from lender to lender, these could be:

• mortgage arrangement fee
• higher lending fee (formerly known as mortgage indemnity insurance), for high LTV mortgages. This is often added to the mortgage
• valuation fee

With regards to surveys, it really is up to you. Some people are happy with the lender's survey (which is just for the purpose of establishing the property offers THEM enough security for the mortgage), others go for a full structural survey. I'd say it depends on the type of property you are buying, if it's a new build still under the NHBC you wouldn't need a survey. If it's an old house you're planning to do up, then a full structural may be in order.

Some people also use other specialist services, for example, an electrician to check the wiring or a damp specialist. Depending on the circumstances, it may pay off to spend a bit more before buying a property, at the very least, you could knock some money off your offer if a survey or report shows the need for costly work to be carried out. :grin:

[ssparks2003]

Re: What fees to expect when buying a house?

Every house i have brought we have gone for a full survey, and everytime this has given us grounds to go back on the price we have agreed, all the houses have been over 50 years old but they have paid for themselves many times over (1st house £15k saving, 2nd £8k saving, 3rd £32k saving).

Simon

[PlanB]

Re: What fees to expect when buying a house?

Husband and I have started viewing properties with the hope of buying our first home in the next few months. We have a deposit more or less ready in a month or so, and I wanted to know a rough estimate of all the costs that could crop up along the way.....

The best way to keep the costs down is to do your homework first. As soon as you see a house you like and make an offer then check out the property for any potential problems which could cause the sale to collapse. According to statistics one in three sales don't complete. Don't wait till you get too far down the line and have already run up legal costs.

Check the property on Land Registry. Get a copy of the Title Plan etc as a PDF download from their website for only £3. This will show you if there are any problems with things such as restrictive covenants. You can do that here:

https://eservices.landregistry.gov.u...0c6McFQH3SLFU/

Then I suggest you check the planning registry on your local authority website to see if there are any applications to build a motorway through the back garden or a multi-story car park opposite.

The biggest single expenditure will be Stamp Duty unless you're buying a property under £125k or in an area declared as "deprived" by the Government. SDLT is 1% of the value of the property between £125k and £250k and then it jumps to 3% which is a lot. After £500k it shoots up to 4%.

Even if you get everything right there is always the chance that you may lose the sale because the buyer pulls out. But you can insure against some of these things for as little as £79. Here's an example of how it works (I'm not recommending this broker, I'm using it as an example):

http://www.connectifa.co.uk/housebuyersinsurance.php

If you're using a broker to get you a mortgage they may be able to arrange for a DIP (Decision in Principle) first. That's a lender's agreement to advance a mortgage subject to survey. The lender will carry out all the credit checks etc and offer a DIP. This is a good idea because if you can show that to the agent your offer will be taken more seriously. It's also good for bargaining power on the asking price because the seller can see that you can definitely proceed with the purchase and even if you make a low offer they may decide to go with a bird-in-the-hand approach.

I note from your other thread that you've had problems with Defaults on your credit file which could get in the way of your mortgage applications. Have you managed to clear up that problem?

[elishas]

Re: What fees to expect when buying a house?

Thank you all for your replies guys, much appreciated it helps alot.

The best way to keep the costs down is to do your homework first. As soon as you see a house you like and make an offer then check out the property for any potential problems which could cause the sale to collapse. According to statistics one in three sales don't complete. Don't wait till you get too far down the line and have already run up legal costs.

Check the property on Land Registry. Get a copy of the Title Plan etc as a PDF download from their website for only £3. This will show you if there are any problems with things such as restrictive covenants. You can do that here:

https://eservices.landregistry.gov.u...0c6McFQH3SLFU/

Then I suggest you check the planning registry on your local authority website to see if there are any applications to build a motorway through the back garden or a multi-story car park opposite.

The biggest single expenditure will be Stamp Duty unless you're buying a property under £125k or in an area declared as "deprived" by the Government. SDLT is 1% of the value of the property between £125k and £250k and then it jumps to 3% which is a lot. After £500k it shoots up to 4%.

Even if you get everything right there is always the chance that you may lose the sale because the buyer pulls out. But you can insure against some of these things for as little as £79. Here's an example of how it works (I'm not recommending this broker, I'm using it as an example):

http://www.connectifa.co.uk/housebuyersinsurance.php

If you're using a broker to get you a mortgage they may be able to arrange for a DIP (Decision in Principle) first. That's a lender's agreement to advance a mortgage subject to survey. The lender will carry out all the credit checks etc and offer a DIP. This is a good idea because if you can show that to the agent your offer will be taken more seriously. It's also good for bargaining power on the asking price because the seller can see that you can definitely proceed with the purchase and even if you make a low offer they may decide to go with a bird-in-the-hand approach.

I note from your other thread that you've had problems with Defaults on your credit file which could get in the way of your mortgage applications. Have you managed to clear up that problem?

PlanB yes I have had previous credit rating problems, what I'm hoping is go to a mortgage provider that will only use Credit Expert as their credit checking agency, as this is the credit file that shows up the least problems, all I owe on that profile is less than £700....Whereas on Equifax it shows up my old loan which is defaulted & I still owe 12k (I pay a debt mgt company monthly). So I'm hoping I can get lucky with the mortgage provider. I already know Nationwide use Credit Expert & I have come across a link from google that actually lists what all the banks/building societies use as credit reference agencies which is handy, whether its accurate is another matter. Either way hopefully luck will be on my side thanks again