Let’s talk about the costs of buying your first home


I recently went through the process of buying my first house and although I thought I was pretty clued up on the costs and what was going to happen there were a few things I did not consider. This blog will be taking you through my experience and the costs I encountered whilst purchasing my first property.

Cost of the process

Deposit

The first cost you need to consider is your deposit. The amount you need will be dependent on the cost of the house you wish to purchase and the percentage of this you wish to put down as a deposit. Many first-time buyers aim for a 10% deposit although you could do more or potentially less depending on your situation. If you were looking to purchase a house for £200,000 at 10% then you would have to save £20,000.

Furnishing your home

You will also need to consider the cost of furnishing your new home. You may be in a position where you already have what you need, or you have parents, sibling’s or friends who are gifting you the important items. However, it is always important to factor in the cost of essential items when budgeting. It can be really useful to note down everyday items, the estimated cost next to them and total it all up so that you have a rough estimate of how much money you need to save on top of your deposit.

Mortgage Advisor

Whilst you can pay for a Mortgage Advisor there are many free options, such as through your bank. If you choose to pay for a Mortgage Advisor the cost can vary, I paid mine £295. I chose my Mortgage Advisor as they were recommended by a friend, and I knew that they had a reliable reputation. Once I had chosen my advisor we talked through the process and the options we had, such as saving for a bigger deposit as this would have lowered the interest rate options available to us. However, as our offer had already been accepted on a house it wasn’t something we had time to do.

Solicitor

This is a cost you will need to factor in and I would recommend getting a few different quotes from various solicitors in your area. When I completed my search for a solicitor the quotes ranged quite a bit, the cheapest was £991 and the most expensive was approximately £400 more. I am based in the North West and the cost of a solicitor can vary a lot depending on your location and how well known the practice is. I highly recommend looking at the reviews they have received before choosing your solicitor.

Valuation

Mortgages include a valuation as a lender needs to know whether the amount of money you are trying to borrow matches the value of the property. When a lender completes a valuation, this does not provide you with any indication of what condition the property is in. It is an estimate of what your property is worth. You can choose to have a survey on the property you are purchasing (this is different to the valuation) as it can help give you peace of mind about the condition of the property. There are two ways to book a survey, you can either chose to do it when completing your mortgage application, so this would happen through your lender’s chosen surveyor. Or you can choose to do this separately and hire a surveyor or your choice. It’s important to think about what type of survey you would like to have on the house as some mortgage providers include a basic survey in their package however others don’t. The purpose of a survey is to alert you to any issues you didn’t notice or couldn’t see when viewing the house and anything that could cause a potential issue in the future. I chose to go through my lender for our survey and we paid £295 to have a more thorough survey on our property. The cost of a survey can vary depending on how you source your surveyor and what survey you would like, as the more thorough the higher the cost.

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