Buyers can sometimes be shocked to discover additional costs associated with purchasing a property particularly if experiencing the process for the first time. Settling a realistic budget for the total costs is a critical first step to ensure that there are adequate funds available. Here are a list of four costs that many first time buyers in Chester can forget about when buying.
When buying a solicitor conducts conveyancing on your behalf; the process to legally transfer property ownership from seller to buyer. The solicitor is responsible for conducting local searches, such as environmental, land registry and bankruptcy, also following up on any legal points raised in the property survey; acting on the mortgage lender’s behalf and drawing up the contract detailing what is included in the property and set out the completion date.
Conveyancing costs can vary so ask for a quote in advance of instruction. Approximately £400 of these costs will relate to purchase disbursements which are costs of investigations and searches.
Stamp Duty is a tax payable for anyone buying a property over £125,000 if no other properties are owned. Tax is calculated on the part of the property that falls within a band for example, the cost of a £130,000 property would be £100 (the property falls within the £125,001 to £250,000 band which means that 2% is payable on the £9,999 portion above £125,001). There are 5 stamp duty bands which, as of April 2016 are as follows:
£125,001-£250,000 = 2%
£250,001-£925,000 = 5%
An additional surcharge of 3% is applied to all bands if you have more than one property at the same time.
A purchaser needs to know if the prospective property is sound and that the purchase price is a reasonable proposition. There are several types of survey to consider. A standard Mortgage Valuation Survey (SMV) will be requested by your mortgage lender before funds are granted and the fee for this is generally included in the price of your mortgage application. An SMV survey will tell you the buyer very little about the condition of the property and is more concerned with the past, current and future potential value of the property to enable the mortgage company to secure your finance against the property.
Some mortgage lenders will offer the possibility to upgrade the report to a Home Buyer Survey. This report will add additional comment not he condition of the property, highlighting any major issues that should be considered before completing your purchase. This report may give you cause to ask for an additional report or a quote from a tradesman for any relevant repairs that maybe necessary. If there are any structural issues that had not been anticipated when agreeing the price, it is at this stage that you can revert to the the vendor to perhaps negotiate the price.
A full structural survey report will comprehensively highlight any structural or cosmetic remedial works or repairs that will need to be considered in addition to any non-urgent issues that will eventually require attention. It will also highlight any legal enquiries that need to be followed through as part of the solicitors due diligence such as boundary clarifications, building regulations documentation, etc..
Mortgage arrangement fees
Arrangement fees are charges to cover administration and reservation of funds for a mortgage. These can be charged in addition to a brokerage fee. It is advisable to shop around for the right lender and/or broker.
Homesale would love to help with any questions in relation to your costs or indeed anything else related to your home purchase, sale or investment. Please feel free to call us on 01244 313900 or pop in to see us at 18 Grosvenor Street we would be delighted to help.