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There are a number of fees you’ll need to consider when moving home, it’s not just your deposit you’ll have to pay for. There’s also solicitor, surveyor, estate agents, and removal fees plus stamp duty (if you’re not a first time buyer). Below are rough estimates for upfront costs you’ll have to factor into your property budget:
Stamp duty
This is a government tax paid on homes costing more than £125,000. If you’re a first time buyer you’re exempt from paying stamp duty on the first £300,000 for properties valued up to £500,000.
Valuation fee
Some mortgage lenders will charge you for the time they take to establish how much they are prepared to lend you. This can cost between £150-£1,500 based on the property’s value. Some mortgage providers may not charge you for this, depending on the type of mortgage product you choose.
Surveyor’s fees
It’s important you get any property you’re considering buying checked by a professional surveyor to understand if there are any problems with the building. From basic home condition surveys (around £400) to a full structural survey (around £800).
Legal fees
You’ll normally need the help of a solicitor to carry out all the legal work when buying or selling a property. Fees can cost anywhere between £850 – £1,500 including VAT at 20% for this. Plus, solicitors will also do local searches which can cost an extra £250-£300.
Electronic transfer fee
This covers the mortgage lenders cost of transferring the money to the solicitor and typically costs between £40-£50.
There’ll also be ongoing costs to your property – with the average maintenance repair bill for new homeowners around £5,700. Plus insurance costs, council tax and any removal costs.
When considering applying for a mortgage, you’ll need to think about more than being able to repay the monthly payments. Mortgage lenders will look at your outgoings and incomings to assess whether they think you can keep up with payments if interest rates rise or you have a change in circumstances. If possible, try and build up savings equal to three months’ outgoing costs including mortgage repayments to protect yourself against this. You can use our mortgage calculator to help determine how much you could afford to borrow depending on fluctuating interest rates.
It can feel daunting and a big financial commitment when looking into buying a property – especially if you’re a first time buyer. Follow these simple steps to help ease the process of buying a new house or flat…
1 – Choose a property you can afford
Think about how much you can afford to put down as a deposit along with paying bills and fees. It’s also good to ensure you have a safety net if your situations were to suddenly change.
2 – Consult with a mortgage advisor and make an offer
It’s a good idea to discuss your options for mortgages with an advisor before making your offer
3 – Arrange a solicitor and surveyor
A solicitor will handle all legal work for buying your property whilst your surveyor will check it over for any problems.
4 – Finalise the offer and your mortgage
Depending on the outcomes of your survey, you may want to renegotiate your offer.
5 – Exchange contracts on your property
Go through with your solicitor to check all details are correct before you sign your contact to complete the sale.
6 – Completion and final steps
This is where any remaining money owed is transferred over, bills are paid, your sale is registered with the Land Registry and you get to enjoy your new house!
To buy a house, you’ll first need to save for a deposit. This is anywhere between 5-20% of the cost of the property you would like to buy. For example if your ideal home costs £200,000 you’ll need a minimum deposit of £10,000 (5%).
Choosing the right mortgage for you and your situation can be tricky when there are so many different mortgage deals on the market. It’s a good idea to do some research and talk to industry experts such as mortgage advisors who can advise you.
There are also other costs associated to be aware of when buying a property alongside monthly mortgage repayments. These can include:
Luckily, first time buyers no longer have to pay stamp duty on properties less than £300,000 in value.
As a first time buyer mortgage advisor I’ll guide you through this process to ensure a smooth transition to homeownership.
There are schemes run by the government that can help you purchase a property as a first time buyer.
Shared Ownership
This scheme allows you to buy a share of a home from the landlord (usually the council or housing association) and rent the remaining share at a low cost. The share available is usually between a quarter and three-quarters of a home’s full value. You’ll need a mortgage to pay for your share – it’s worth speaking to a mortgage advisor about this first. You can choose to buy a bigger share in your property (up to 100%) at a later date.
As one of the biggest financial decisions you’ll probably ever make in your life, it’s important you work out what the right mortgage for you will be. By enlisting the help of a mortgage advisor, they’ll do the hard work for you in scanning the market for the best available options. They’ll then work with you to decide upon the most suitable mortgage for your situation. Most Mortgage Advisors charge for their service, depending on the product you choose or the value of the mortgage. Others are free as they’ll receive commission from the lender. You’ll be told upfront how much you can expect to pay for their service.
Make sure you have researched into everything before putting an offer in (such as the location and potential future problems) to ensure you’re fully aware of what you’re buying into. Also ensure you have planned your budget to factor in changes of circumstances, extra costs of buying a property (such as survey and solicitor fees) and try to stick to this budget.
Only put an offer down on a property you can afford to buy and spend time looking into different mortgages. It’s a good idea to ask for help from an unbiased, professional mortgage advisor who has access to a range of lenders and finance options.
Also it’s good to be aware that there are certain types of property that are more difficult to get mortgage lenders to approve, this includes: high-rise flats, flats over shops or restaurants, short leasehold flats, homes of unusual construction (timber or concrete build), brownfield sites, character homes and Grade 1 listed properties.
To apply for a mortgage you may need to gather the following documents: utility bills, proof of any benefits received, P60 form from your employer, your last 3 months payslips, passport or driving license and bank statements of your current account for up to at least the last 3 months. If you’re self employed you’ll need your Tax Calculations and Overviews Statements.
When applying for a mortgage, lenders will use your salary and any other additional income to work out your household income. They’ll also take into account all household bills and outgoings, along with any debts to ensure you will be able to repay monthly mortgage payments. After you’ve submitted a formal application, lenders will then make a Credit Check with a credit reference agency to assess your financial history and to see if you’re too much of a risk to lend money to.
By seeking the advice of a mortgage adviser, they’ll look at your current situation and recommend the right mortgage for you. They’ll explain all the charges and fees, calculating the total cost of your mortgage and guiding you through the often daunting process of a mortgage application.
The average first time buyer puts down a 20% deposit on their first home. But how can you save up this amount of money?
Work out your payment options
Whether you receive a loan or lump sum from family to help you gather enough money, or you opt for one of the government’s help to buy saving schemes, there are a range of options to consider when deciding the size of your mortgage deposit. Take time to research into each.
Save each month
Regular saving is more effective than relying on one-off irregular payments. Look at how much you can realistically afford to set aside each month and calculate how long it might take to save for a deposit. You can set up a standing order to pay into a separate savings account to automatically save each month.
Monitor your savings
Regularly review your savings to check you’re getting the best rate of interest and that you’re still on track with your savings plan. When you’ve saved a good deposit, it’s worth consulting with a mortgage adviser to discover what mortgages are currently available that would be right for you.
A cross between buying and renting, the government’s shared ownership schemes are mainly aimed at first time buyers. You can buy between a quarter and three-quarters of a property, with the option to buy a bigger share at a later date. In England, all shared ownership homes are offered on a leasehold basis only.
It’s worth speaking to the Housing Team in your local council to see if the scheme is available in your local area.
For more details go to
On clicking the above links you will leave the regulated site of Rachel Dixon. Rachel Dixon, nor Sesame Ltd, is responsible for the accuracy of the information contained within the linked site.
All mortgage advisers work on a different basis. Some charge a broker fee and receive commission from the lender, some charge a broker fee and rebate partial commission that they receive from the lender whilst some do not charge a broker fee as commission is received from the lender.
Here at RH Dixon we won’t charge you a fee, as we will be paid commission by the lender. When working with us, you will receive a personalised illustration for the mortgage we recommend. This will tell you about any fees, and the commission we would receive.
In England and Northern Ireland, you don’t have to pay stamp duty on properties worth up to £300,000. If your property costs up to £500,000 you will pay stamp duty on the remaining £200,000. If your property costs over £500,000 you will pay the standard rates of stamp duty and will not qualify for first time buyers relief.
If you’re not a first time buyer, for properties over £125,000 you’ll have to pay stamp duty land tax on your purchase. This tax applies for both freehold and leasehold properties. To pay stamp duty, you’ll need to submit a Stamp Duty Tax Return and pay what you owe within 30 days of completing the purchase of your home.
If your mortgage application has been rejected, there are steps you can take to improve your chances of being approved for another one. First check your credit file with credit reference agencies to see what information they have about you and correct anything that’s wrong.
You need to be on the electoral register at your current address so a lender can confirm who you are and where you live. Try to avoid taking our new credit deals at least 12 months before you want a mortgage, and remember any payday loans during the last 6 years will be on your file even if you’ve paid it off on time.
The best way to ensure you’re in the right position to successfully apply for a mortgage is to consult with an unbiased mortgage adviser who will be able to find the right mortgage for you.
For more information on mortgages go to www.moneyadviceservice.org.uk/en/categories/buying-a-home
On clicking the above links you will leave the regulated site of Rachel Dixon. Rachel Dixon, nor Sesame Ltd, is responsible for the accuracy of the information contained within the linked site.