Additional costs new home buyers overlook

It’s not just the cost of the property you know…

If you’re committing to buying a home for the first time then you’re probably already slightly overwhelmed by the figures involved. However, it’s not just the price of the property that you need to bear in mind. These are some of the key additional costs that many new home buyers tend to overlook.

Stamp Duty/taxes

This is payable by the buyer of a home and, unless you’ve managed to land a property that comes with stamp duty or taxes already paid, (there are a few out there) then it’s an additional cost to consider. Property taxes tend to fall into different brackets depending on the value of the property and move upwards on a sliding scale. Each tax percentage is usually paid on the proportion of the property price that falls within the threshold.

Moving costs

Moving support varies in cost from the full blown package, where you don’t have to lift a finger, to the hire of a van that you load and unload yourself. Remember too that you may need to set up a storage facility if there is likely to be a gap between moving out of one property and into another – and that this could double your moving costs if the timing works out that way. You may end up having to take out an unsecured loan to cover these additional costs or even get your parents involved as guarantors for a guarantor loan if you haven’t got enough money saved.

Insurance

With any high value asset it’s important for the owner to insure it – and that goes for property too. There are many different types of homeowner insurance to choose from, offering various levels of cover, and some properties and locations require very specific policies. Remember that your mortgage provider may require you to have home insurance, as well as mortgage insurance to protect your repayments if you’re not able to make them.

Repairs and renovations

Before you make an offer on a property make sure you have costed up any potential repairs and renovations that it needs. It’s all too easy to get caught up in the feeling of “this is the one” and to forget that if the property needs serious repairs it’s going to add substantially to the overall cost to you. Key areas to look at include the roof and walls, bathroom fittings and the kitchen. It may even be possible to factor in some of these potential costs into a reduction of the overall purchase price.

Closing costs

This category covers any expense that is likely to arise during the process of closing your sale. So, there will be a fee to pay on the mortgage, for example as well as the costs of lawyers and surveyors. You will have to pay for certain searches, such as those on the building and the land, and there will be an agent’s fee to pay if you used one.

All of these additional costs can have a big impact on whether a new property is really affordable for a first time buyer and all are in addition to the monthly cost of a loan you need to buy the home in the first place. Whatever your situation, make sure you factor them all in.

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