Moving can be an exciting but expensive time. Drawing up a budget will help you work out how much cash you will need for the fees you can expect to pay. The exact figure will depend on which rung of the housing ladder you’re on, whether you’re buying and selling, and which part of the country you live in.
There are costs involved with arranging a mortgage and your adviser will talk you through these in detail and confirm them in writing.
You’ll need a solicitor or a conveyancer to carry out the legal work. Typically, they will charge between £500 and £1,500, and will provide an up-front estimate of their fees. If you’re selling a property at the same time, you may be able to negotiate a package deal to cover both.
The cost of selling
If you’re buying, you don’t have to pay estate agents’ fees, but if you’re selling you can expect to pay a percentage fee which can range between 0.75% and 3%, plus VAT, of the agreed selling price of your home, depending on the type of contract you opt for. Alternatively, you can adopt the DIY approach and put your property onto a website, in which case your costs will be lower, but you’ll need to do a lot of the work yourself, including arranging viewings.
You should also consider getting a survey done to ensure you aren’t buying somewhere that could end up costing you a lot of money in repairs. Depending on the type you choose, you could be paying anything from £250 for a basic report to around £1,000 for a more detailed structural survey.
Then there’s stamp duty (Lands & Building Tax or LBTT in Scotland). This is payable on properties bought for over £125,000 in England and Wales and £145,000 in Scotland, and goes up in bands. For example, it would be £5,000 on a £300,000 property in England and Wales (0% on the first £125,000, 2% on the next £125,000 and 5% on the last £50,000). Don’t forget you may also need to book a removal firm, so there are a whole myriad of costs to budget for.
As a mortgage is secured against your home, it could be repossessed if you do not keep up mortgage repayments.