There are many different costs associated with moving. By working out the details in advance, you can reduce the risk of any unbudgeted costs arising.
Buying a Home
Your deposit is usually the largest cost when you buy a new home. Many lenders require that you have at least 10% of the purchase price to put down, although some do now offer 95% mortgages.The greater the deposit, the better the interest rate on the mortgage that you can arrange. If you use a mortgage calculator UK lenders can be assessed and you can decide on the optimum deposit/loan ratio that you can afford.
If you are borrowing a high percentage of the property’s value, your lender may insist you take out mortgage-indemnity insurance. This typically costs around £1,500 per £100,000 borrowed.
There may also be a mortgage-arrangement fee payable. Often the better deals have higher arrangement fees. Many lenders allow you to add this to your mortgage, so you should factor this in when using a mortgage calculator.
As well as the amount you have calculated you can borrow using a mortgage calculator UK lenders will require that you pay for a mortgage valuation report, so you should add £100 – £300 to your budget. Many buyers opt for a full survey, costing around £300 – £600, or up to £1,000 for a structural report.
Legal fees should not be forgotten when it comes to working out your budget. Conveyancing can range from about £200 to £1,500, depending on the value of the property and amount of work required.
You will also need to pay your solicitor for searches. For standard properties, these should cost in the region of £300. Additionally CHAPs fees, typically £30, are usually charged to transfer money from your lender to your solicitor.
Stamp Duty becomes payable at the point at which the purchase goes through. There are a number of different thresholds for freehold residential sales in the UK, dependent upon the value of the property. These range from nothing on properties below £125,000 to 5% on properties over £1m.
You will also have to pay a Land Registry fee. This is based on the purchase price of the property, ranging from £40 for properties up to £50,000 to £700 for properties over £1m.
Buildings insurance is also required by mortgage providers. This will typically cost several hundred pounds or more, depending on the cost of rebuilding your new home.
Selling a Home
The main cost in selling your home will be estate-agent fees, which will typically be 1-3% of the sale price of the property.
You will also pay legal fees in relation to the sale. Conveyancing will usually cost between £200 and £1,500, depending on the value of the property and amount of work that needs to be undertaken.
You may also incur penalties under your existing mortgage arrangements. Early-repayment charges of between 1% and 4% can apply if you are still within the tie-in period of the loan. Some lenders also charge an exit fee of up to £300.
Finally, you may be required to pay for an indemnity insurance policy if there is a defect with the title of your property. There are a number of unavoidable costs that you will incur when moving. By using a mortgage calculator UK mortgages can be researched to find the best one for you. By sitting down and calculating a budget, you can hopefully avoid any unexpected costs.