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If you are planning on buying a property you need to make sure that you fully understand the costs involved, and to make sure that you are prepared financially before you buy. 

At Wrights Property Agents Ltd we understand that our customers can sometimes find this daunting especially if it is their first time on the housing ladder.

That’s why we have put together a handy guide to the main financial costs that you need to consider before you buy a property. 

And because we’re here to help we have also created a useful mortgage calculator and a stamp duty calculator for you to use. 

Of course, we always recommend that you talk through your finances with a financial advisor who will be able to give you more in-depth advice.

Mortgage costs

When most people buy a house, they need to take out a long term loan which is known as a mortgage. These are provided by banks and building societies and each mortgage will have its own specific features and interest rates. You will need to consider the different features carefully to make sure that you choose the mortgage that is right for you. 

Mortgages can run for up to 30 years in some cases, so they are a long term commitment. You also need to ensure that you can pay your mortgage each month or your home may risk being repossessed. Because there are so many different types of mortgages out there, we recommend that you have a chat to your bank, building society or financial advisor to help you get the best deal for you. 

Our Mortgage Calculator Tool can help you to get an initial idea of what you may be able to afford.

Deposit costs

When you buy a house, you will generally be expected to provide a cash deposit. This usually takes the form of a percentage of the purchase price of the property you are buying. 

On average in the UK house buyers pay around 20% of the sale price as a deposit. For example, if you are buying a house for £100,000 you may provide a deposit of £20,000 and take out a mortgage for £80,000. It is important to bear in mind that the higher the deposit you can pay the better mortgage rate you may be able to receive so having a good deposit can make a positive impact on your finances. 

However, if you don’t have a large deposit then the good news is that you may still be able to buy a house. There are a number of 90% or 95% mortgages available on the market especially for first time buyers.

Legal costs

When you purchase a house, you will usually need a solicitor to help you draw up the legal documents involved and to conduct local searches for you. Solicitor’s charges can vary depending on the complexity of the transaction but are generally somewhere between £500-£1,500. If you need a solicitor in Hatfield, Stevenage or Welwyn Garden City to help with your house purchase or sale then Wrights are happy to recommend a local solicitor to you.

Survey costs

Before you exchange on a house purchase, we recommend that you undertake a survey of the property you are going to buy. This should be done by a qualified surveyor and there are a couple of different options that you can choose. A Home Buyer report is slight cheaper and can cost up to £500. It provides a general overview of the property. 

A Building Survey looks at the property in greater depth and is usually appropriate for buildings over 40 years old. This can cost between £500-1,200. Wrights are happy to recommend a local surveyor if you choose to have a survey completed.

Stamp Duty Costs

Stamp duty is a government tax on land and property transactions. At the moment it is payable on any residential property worth over £125,000. The amount of tax payable increases with the value of the property you are buying. 

To help you understand how much you may have to pay Wrights have created this stamp duty calculator to help you find out more about your potential costs.

Other Costs

As well as the main costs detailed above there are a number of other costs that you may want to factor into your house move. There may be decorative or structural work to be done to the house and there could also be removals costs to help you move your belongings into your new property. 

You will also need to have buildings insurance in place before you move in, and it is a good idea to get your contents insured too.