Tag Archives: Property

ByRated Financial

The true cost of buying a property

Until they come to count the pounds and do the sums, very few people have a full idea of the actual cost of buying a property. They might have a vague idea but it’s research and full consideration which leads many people to put their plans to start viewing properties on hold for a further few months while they add to the fund.

However, for ease of reference, anyone seeking to buy a house would be wise to consider the following when working out how much they need to save:

Deposit

100% mortgages (where the amount borrowed is 100% of the property purchase price) have become all but obsolete – the vast majority of high street lenders won’t even consider a 100% mortgage. In modern, post-recession times, a buyer will have to put at least 5% of the value of the property towards the purchase as a deposit. In many cases, a lender will require their borrower to put closer to 20% of the property value as a deposit and will offer more attractive interest rates to those with higher deposits.

Legal fees

It is virtually impossible to purchase a property without the assistance of a solicitor. In addition to ensuring the property is as it should be on behalf of the buyer by way of carrying out searches and surveys with local authorities, water agencies and (where applicable) the coal mining authority, they will also ensure it is properly registered to the buyer and their lender once the sale has been completed. Legal fees vary between areas but on average the cost of a solicitor to carry out conveyancing is in the region of £1,000.

Arrangement fees

Most lenders have arrangement fees (which is to say the administration fees they require to put the mortgage in place) which must also be paid. Some of these institutions may offer to add the fees onto the total amount payable, but it’s worth noting that in this case, there will be interest to be paid and it could end up costing far more than if they had been paid outright in the first place.

To discuss buying a property and getting a mortgage give us a call on 02084324566 to speak with one of our advisers who can guide you.