Buying a home can be very expensive. The most obvious cost of buying a house is the actual price of the property. Most buyers get into conveyance with only this cost in mind. They fail to realise that there is one or more another hidden cost of buying a house. The result is that the buyer is confronted with bills he did not expect. The worst thing is that these additional expenses have to be paid by the buyers own pockets and not with loans or mortgages. It is important for any buyer to get into conveyance with sufficient knowledge of the expenses he will have to cater for.
The very first cost of conveyance that you will be confronted with is the solicitor’s fees. Solicitors’ fees are a payment made for the services of solicitors. Solicitors are experts in real estate transaction. They help buyers and sellers in exchanging properties. Property transaction cannot sail through smoothly without the input of solicitors. They help buyers and sellers draw contracts, perform property investigations and file relevant documents. They usually charge about £800.
The other cost of conveyance is the cost of property survey and valuation. Property survey help elucidate the cost of property. The survey takes into consideration size, location and age of the property. A buyer cannot get a mortgage without having an accurate property survey report. There are many types of survey reports. Each of these serves a different purpose and cost a different amount of money. The most important one is the Standard Property Survey. It gives a brief account of the condition of the property and the possible market value of the property. The law requires that a buyer conduct at least the Standard Property Survey.
Stamp duty land tax is the other hidden cost of conveyance. Stamp duty is like an income tax. Strangely, it is charged to the buyer rather than the seller who is indeed the recipient of the price of the house. Stamp duty is charged on any newly built residential home that is worth more than £125,000 or any other property that is at least £40,000. That is, if you are buying your first home, you will be charged tax when your home is at least £125,000. If the home you are buying is the second or subsequent home, or when it is a buy to let property, taxation begins at house prices of £40,000. Stamp duty taxes, like income taxes, are grouped into various bands with each band having a different rate. The higher the price of your house, the more stamp duty you will have to pay.
Mortgage arrangement fees
You should also expect to pay mortgage arrangement fees. These are the cost of processing a mortgage. Mortgage arrangement fees vary from one lender to the other. Some of these lenders have refundable arrangement fees while others do not. The arrangement fees include mortgage application fees, mortgage broker fees and mortgage transfer fees. Other conveyance fees include estate agent fees and life insurance processing fees.