Purchasing your home is probably one of the most significant expenses you will ever face. There is not just the property deposit to consider, but legal fees, stamp duty, and other costs.
Here are five of these other costs that you may not have considered.
Mortgage Arrangement Fee
You might be squared-away in terms of how much of a mortgage you need, the interest rate, and the amount of deposit required. However, you might have failed to take into account the arrangement fee for your mortgage.
These fees can range from a few hundred quid to over £1,000. Some lenders will allow you to include this fee as part of the mortgage. However, others will insist that it gets paid upfront, and this can be a hefty outlay for some buyers.
If you opt to have the arrangement fee included in the mortgage, be aware that it will cost you more in the long run as you’ll be paying interest on it.
Bank Transfer Fees
When your mortgage funds get transferred from the lender to your bank account, there is a transfer fee. The typical cost of this fee is around £40-50.
Moving from your current dwelling to your new home comes with a few costs too. First off, if you plan on doing it yourself, you will need to hire a van. If you hire a removal company to do it for you, the price will range between £300-1,400. Which option you go for usually depends on the amount of stuff you need to move.
If you have high-value items, you might want to consider getting some insurance for the move. Also, think about the cost of boxes, packaging, tape, etc. There might be storage costs involved if there is a lag in the availability of your new home.
If you have children or pets, you might want to get them out of the way for the moving day. So, there might be costs for childcare or pet-sitting.
These moving costs might seem small when viewed individually, but they could add up to a considerable expense that has not been budgeted.
Fixtures and fittings
Getting into your new home and getting settled is your priority for the moving day. It might have slipped your mind that there will be no curtains, blinds, or other fixtures and fittings. Some of these things, you might have to fork-out for on day one.
Make sure you know exactly what the previous owners will leave in terms of fixtures and fittings. It is possible to negotiate with the seller and get them to agree to leave all manner of features as part of the deal. Just make sure that you are not paying over the odds for these.
To qualify for a mortgage, you will need to ensure that your new property is insured from the first day you take ownership. This security cost you might not have considered if you have previously lived in rented accommodation.
There are two types of insurance needed; building and contents. Often it is cheaper to combine the two into a single ‘building & contents’ policy. The cost of your home insurance will depend on a range of factors, and on average, it costs around £80 per year.
Another stipulation of your mortgage might be the need for life insurance. Having this in place to cover the mortgage, is a prudent step, offering protection to your family should the worst happen.
Considering these costs, and budgeting accordingly, will hopefully leave you with no tremendous financial surprises on your moving day.