Hidden Homeownership Expenses To Be Wary Of
There are many costs to consider when buying a home. Some of the most obvious costs include:
- The mortgage deposit
- Mortgage monthly instalments
- Repairs and maintenance
- Utility bills
While it’s these costs that you should budget for the most, it’s worth noting that they are not the only costs. In fact, there are many other hidden expenses to be wary of when buying a home. This post lists a few of the hidden costs of home ownership that typically get overlooked.
Conveyancer fees
A lot of legal paperwork needs to be done when buying or selling a home. It’s typically recommended that you hire a conveyancer to handle this paperwork for you, as some of it can be quite complex. Conveyancer fees can vary a lot – in most cases, expect to pay between £300 and £1500.
Surveyor costs
Before buying a property, it is always worth hiring a surveyor to inspect the condition of the property. This can give you a good idea as to which repairs you may need to make in the near future, and whether it’s worth taking on these repairs. You can also hire a surveyor when selling your home – this could enable you to make any necessary repairs before selling to potentially increase the value and salability of your home. Surveyor fees cost between £400 and £1500 on average.
Hidden mortgage costs
There are often other mortgage fees to pay upfront beyond the deposit and first month’s rent. You will almost always have to pay a mortgage valuation fee, in which a mortgage lender representative will inspect the condition of the property to ensure that it’s mortgage-able. This costs about £300. You may also have to pay a mortgage booking fee between £100 and £300. Mortgage contracts may also contain other extra fees worth looking out for such as missed payment fees or even early repayment fees.
Ground rent
If you opt for a leasehold property, you will own the property, but not the land it is built on. Because of this, you may have to pay an extra fee for use of the land called ground rent. This can cost between £300 and £700 per year. While lease owners are legally obliged to charge ground rent, some may charge very little and not even collect it as this peppercorn rent meaning explains. Such properties can be a great find.
Service charge
Blocks of flats and properties with communal areas typically have to pay a service charge. This is to cover cleaning and maintenance of these communal areas. Annual service charges can be between £200 and £2000 depending on the amenities that are on offer.
Stamp duty
Stamp duty is a land tax that costs between 2% and 12% of a property’s value. First-time buyers are exempt from paying it currently, however all other homeowners must pay it by law. Stamp duty must be paid within 14 days of purchasing a property. You can learn more about stamp duty here.
*This is a collaborative post.
