TRUE COST OF HOME BUYING (UK) 🏑 πŸ‘¨β€πŸ‘©β€πŸ‘¦.  Β£2000  Added fees & expenses broken down step by step.

TRUE COST OF HOME BUYING (UK) 🏑 πŸ‘¨β€πŸ‘©β€πŸ‘¦. Β£2000 Added fees & expenses broken down step by step.

There is about Β£2 000 worth of
costs and expenses associated with buying a house. In
today's video I'm going to break down these costs for you. Hi, my name is Jeena welcome to my channel.
If you're new here my channel is filled with lots of tips and tricks
to help you save time and money. So let's get straight to the additional cost of
buying a house. The first fee is called the mortgage
arrangement fee also known as the booking fee or the
reservation fee. This is usually the biggest expense and
expect to pay anywhere between Β£500 to Β£2000 . For this fees
most people tend to add this cost to their mortgage costs for example
if you have a mortgage ofΒ£150,000 you and a
an arrangement fee Β£1000 you can add this Β£1000 to
the mortgage cost. The disadvantage is you pay the interest rate on the
additional thousand pounds as well but you always overpay by this Β£1000 at a later date so it's not a big deal.

The big advantage
though is you have got a big chunk of money for
other additional costs for example buying furniture for a new home.
Also, the other big advantage is if you pay for this you'll usually have to pay
it upfront so if the mortgage deal or anything falls through
you may lose the money for the mortgage arrangement fee. So it is advisable to
add this cost onto the mortgage. Sometimes it's good to pay a lower
arrangement fee but a higher interest rate. I will put a link in the
description box below for the website that I use to
compare two mortgages with the additional costs. The second additional
expense is broker fees.

Most people do not have to pay this
broker fees because there's a lot of fee-free mortgage products wherein
the fees for the mortgage advisor is paid by
the lender. In certain circumstances it might be advisable to go to a
paid mortgage advisor and it's mostly advisable when you have some credit
issues. When we bought this house we had just
recently become self-employed and like I told you previously the fees
for the mortgage advisor comes from the lender.
So certain products do not have fees so then the mortgage advisor does not
recommend those products to us. So in certain circumstances, it is
advisable to go to a paid mortgage advisor. The average brokerage fee is
between Β£500 to Β£1000. But always make sure you do not pay any
upfront cost of the mortgage advisor. It's only cost on completion. What we did
is we first went to a fee-free broker who
said that there is no products available then we paid another mortgage advisor
who then found as a product that was suitable for us and we paid him his fees
on completion of the contract.

The third additional expense is the
valuation expense or the survey expense There are two or three layers to this
expense the very basic is the valuation expense
and the bank always asks for this but you pay for it
and it's about Β£250. This valuation fee is to benefit the bank
to make sure the bank will get their money back and the property is worth as
much as we're paying for it so it is to value the property.
The survey fees is to benefit you the buyer
and it's to assess for structural problems or any dampness or any rot etc.
There are two layers for this most people buy the homebuyers report which is
about Β£500. But if you're buying a period property
or a really rundown property then you want to go for the full structural
survey which is about Β£800 or Β£900. If
there are any problems identified at the survey for example if
the valuation is not as high as you're offered or if there's any
additional repairs that needs to be done you can use this as a negotiation tool
to knock a little bit off the asking price.

Most mortgage companies have their own valuators and most people go with the
bank's own valuator. You can also arrange for your own
valuator based on recommendations from people and things.
This is slightly different if you're buying in Scotland. In Scotland people
do not normally have to pay for a survey this is
usually done for by the seller of the house and is included in the home buyers
report. Next big expense is a solicitor's fees
also known as a conveyancing costs. Most mortgage companies also has a
conveyancing solicitor as part of their team
but they often tend to be more expensive so it's best to go with an independent
conveyancer. Solicitor does a lot of checks. Check with the council they
check with the land registry they check the source of your funds and where your
money is coming from for the deposit and things.
They link up with the estate agent as well as the mortgage advisor as well as
the solicitor from the seller's party so
that's what you pay for and the average cost is between Β£900-Β£1500. Some solicitors give a cheap upfront
cost of Β£500 or Β£600.

And then have this additional expense of
chaps or pay for this search and pay for that
search. So if you're shopping around for solicitors
and getting quotes of different solicitors ask them to give you a
completed code with all the additional and extra charges.
Next additional cost is stamp duty. So currently in
September 2020 there is a stamp duty. holiday.
And this offer is up to March 2021.

conveyancing process uk

I've done a complete video on stamp duty
holiday so feel free to check it out where i've gone into full detail about
it. But basically up to Β£500 000
property you do not pay any stamp duty and between £500,000-££925,000 you pay a 5% stamp duty . So if your property is around £600,000 you do not pay any stamp duty for the first £500,000 and you pay a 5% stamp duty
for the next Β£100,000 which is Β£5000.

There's a
lot of rush in the property market to beat the stamp duty holiday deadline
and some of the property prices have inflated
because of the demand for properties at present . So you may want to wait till
after the stamp duty, holiday period is passed.
The next big expense as soon as you buy a property is home insurance.
All mortgage companies insist on having a home insurance.
So this is to pay for things that happen to the property for example fire or
floods or anything like that so if there's any damage to the property the
mortgage companies still get their money back for the property. And the rough cost
for home insurance is between Β£130-Β£200 It is always best to go to a comparison site to shop for your home insurance.

And insuring your contents or not is optional and it's up to you.
The next expense is removal costs. For some people it might be just
a few trips in the car. But if you were renting an unfurnished flat you will
want to move your furniture and things. And the average cost is about Β£100 -Β£200.
You can choose to hire a van and drive it yourself
or you can hire a man and a van and they can help you with the moving.

The next expense is furniture. If you're a first-time buyer you probably don't
have a lot of furniture and you can get furniture from family and friends.
There's also other places like Facebook marketplace or
and ebay and things to buy good quality secondhand furniture.
So let's total up these expenses as a first time buyer
with a property value of Β£250 000. The arrangement fee I put
between 0 and a Β£1000. I've put 0 because you can add this to
your mortgage. So it's not an initial expense as you're
exchanging on the property.

The mortgage broker fee I put at 0
stamp duty I put it at 0 again. Valuation fee most people pay for the
home buyers report which is around Β£500 Solicitors costs I've put around Β£ 1 200 Insurance costs I've put around Β£130 which is on the lower end of the
spectrum. So just with this, you need an additional
of Β£1830. And to add to that if you have a little bit of moving expense or a little bit of
furniture expense it can be well over Β£2000.
I've calculated this as a first time buyer. If you're a second-time buyer
selling your first property you may have extra conveyancing costs
for selling your property and estate agent fees for selling your
profit so you'll definitely be paying more than this Β£1800. So as excited as you are to move into
your new house don't forget to plan and budget for
these additional expenses.

If you've liked today's video, please
give me the thumbs up like button and share this with a family or friend who
may be buying their first home. Please consider subscribing to my channel for
more time and money-saving videos on a Tuesday and on a Friday. Before you
go you may want to check out my other videos
especially the video on the stamp duty holiday that I've discussed in this
video. Thank you for watching me today and stay
safe. Bye.

As found on YouTube

Looking to see what kind of mortgage you can get? Click here to see

Leave a reply

Your email address will not be published. Required fields are marked *