The Hidden Costs of Buying Your First Home

A simple guide to budgeting for the house extension you’ve always wanted

Buying your first home is an exciting time, but buyers are often stretched to their limits when it comes to money. It’s nice to see a price tag on a property and then think, ‘there’ll be enough left over to furnish every room’. Unfortunately, that’s very rarely how it goes because first time buyers aren’t always aware of the many other costs involved in purchasing a first-time home. If you’re ready to buy your first home, here are the costs you need to squeeze into your budget before you do.

Stamp Duty

Stamp Duty only applies to people buying a home in England, Wales and Northern Ireland. The property also has to be over £125,000. How much you pay will depend on the price of the property and the tax band you fall into. You must pay this fee within 30 days of the contracts being signed and exchanged. Your solicitor will usually pay HMRC on your behalf. For example, if you purchased a property that cost £300,000, you would pay an additional £5,000 for stamp duty.











Solicitors play a vital role in securing the purchase of your property. Along with going through your contracts, they’ll also liase with the seller’s solicitors and your lenders in the hope of getting you in the property as quickly as possible. As a first-time buyer, you can expect to pay anything up to £800 for conveyancing services. This will include searches, land registry and exchange of documents. Before making an offer, you may want to shop around by looking at money saving expert conveyancing. You’ll want to save as much money as possible, but make sure you choose a reliable firm.










The Deposit

Getting a deposit for a house together is no easy feat. Many banks even ask for as low as 5% but first-time buyers often make the mistake of saving only 5%. That kind of deposit is only offered in certain circumstances and it’s often accompanied by high interest rates. If you want to get the best deal from your lender, it’s smart to have at least 10% available when you apply. Here are some tips when it comes to saving for a deposit.


Valuation Fee

It’s often a condition of most mortgages to have a valuation before the terms are agreed. Some mortgage companies may offer a free valuation if you’re lucky but it’s likely you’ll have to pay for it, along with a home survey. These are to give you and your lender peace of mind that the property is safe to live in and severe damage to the property isn’t likely to occur. This can cost anything between £150 and £500 depending on the level of survey that’s done. Most mortgage companies will accept a basic report but it’s safer to have the property checked thoroughly.


If you can budget for all of these costs before you start the buying process, you won’t have any nasty surprises along the way, which will make buying your first home a whole lot sweeter.


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Written by themoneyshed

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