Becoming a first-time buyer is an exciting milestone, but without a carefully planned budget, unexpected costs could get in the way. Beyond the initial deposit and monthly mortgage repayments, there are several financial commitments to keep in mind.
Setting aside funds now means you’ll be able to cover future home repairs and maintenance too. Here are three of the most important considerations to make budgeting for your first home as simple as possible.
- Solicitor’s fees
We recommend keeping at least £2,000 to cover legal fees. While these might be one of the biggest commitments when you’re buying your first home, the peace of mind they bring makes them well worth the cost.
Hiring a solicitor to help you through the process is known as conveyancing. This typically includes contracts being drawn up and arranging the payment transfer when you buy the property.
Next, your conveyancer will also be responsible for starting the local authority searches. These include essential checks on the area, including whether there’s a flood risk, proximity to contaminated land, or any other future development plans.
- Closing costs
The fees that buyers need to pay when they’re finalising the process are known as closing costs. These are separate from the downpayment and typically include charges for:
- Valuation: Even if you don’t proceed with the deal, you need to pay for a home valuation before a lender provides you with a loan.
- Land registry fees: These are due when a change of ownership needs to be recorded by HM Land Registry.
- Appraisal fees: The appraisal process confirms the market value and assures lenders that a property is worth the loan.
- Loan origination fees: Administrative process fees charged by lenders on receiving a new application.
- Title insurance: Protects lenders and buyers from issues with property ownership, keeping titles free of legal concerns.
- Recording fees: Paid to local authorities to record and confirm the transfer of ownership in official records.
Buyers and sellers both may need to cover different portions of these costs independently. With all these areas covered, you can ensure peace of mind when you’re choosing between the best new build homes for your family. Remember, you’ll also need to pay stamp duty land tax if you’ve owned a property in the past, even if it was shared.
- Moving expenses
Finally, removals need to be factored into your budget too. Some buyers choose to move all their belongings on their own, but this might quickly become very time-consuming and stressful. Even hiring a van for a day might not give you enough time to get the job done.
Boxing up your own things means you should budget at least £1,000 before you find a removals company to do the heavy lifting. If you think you’ll need to store your belongings or hire extra help in the organisation stage, it’s worth saving even more.
Finally, don’t forget that home repairs and maintenance costs could quickly become part of the buying process. Once you’ve moved in, your new home is a blank canvas for your creativity! With all the essential moving costs in mind, save as much as you can for the fun part too.
