How To Budget For Buying a New Home
Beyond the purchase price of your new home, there are a number of additional costs to factor in. Our guide explains what you’ll need to budget for.
When planning to buy a house, it’s important to consider all the associated costs such as mortgage and legal fees, as well as moving costs. Where possible, it’s always best to do your research and compare quotes for the services you need.
Below is a list of all the costs you should budget for when planning to buy a new home.
Your deposit will be a percentage of the property price (at least 5%) which will bridge the gap between how much your mortgage lender is willing to loan you and the cost of the property. With a bigger deposit comes better mortgage deals and lower interest rates.
The Help to Buy scheme lets first-time buyers purchase a new home with just a 5% deposit. As approved Help to Buy providers, we can answer any questions you might have about this government scheme.
Stamp duty is the tax you pay when you buy a property. This is calculated according to the cost of the property and whether you’re purchasing it as your main, or an additional, home.*
Conveyancing is the legal process of buying a property. Fees are split into legal fees (which your conveyancer or solicitor will charge for doing the work) and disbursements, which include various local searches and registering ownership with the Land Registry.
Conveyancing costs vary according to the purchase price of your new home and solicitors will typically charge more than conveyancers. You can expect to pay up to £1,500 for conveyancing costs and up to £450 for disbursements.
A property survey is optional but will provide you with peace of mind that your new home is in good condition. This is generally more applicable to old or unusual properties, listed buildings, or homes that have timber frames or thatched roofs. A survey will help you avoid any expensive surprises after you’ve moved in and give you the added reassurance of knowing your property has been looked over by an independent, expert surveyor.
With new build homes, you’re unlikely to have the same concerns you would do if you were purchasing an older property. That said, some people opt to have a professional snagging survey carried out.
At Morrish Homes, we pride ourselves on the outstanding quality of our new build homes. For your peace of mind, we not only offer a ten-year National House Building Council warranty but our very own two-year warranty that covers any snagging issues.
Lenders will charge a mortgage valuation fee to check how much the property you’re buying is worth. This fee is paid upfront to your mortgage lender and you should typically budget around £250, though this may vary according to lender and purchase price.
Mortgage companies often charge arrangement fees. This can sometimes also be called a product fee, booking fee or application fee. Some lenders require upfront payment while others add it to the mortgage, meaning you’ll pay interest on it. Fees can vary from a few hundred pounds to 1% of the mortgage, though it’s safe to generally expect to pay between £1,000 and £2,000.
If you choose to work with a mortgage broker, they will generally charge a fee for their services. It’s worth discussing this before you start working with a broker so that you can factor their fees into your budget. It can also be a good idea to do some research to compare rates or perhaps even find a reputable fee-free broker. You could also speak to friends and family to get their recommendations.
You’ll only pay these if you’re selling a property and fees can vary, so it’s worth doing your research and discussing this in detail with your estate agent. Alternatively, if you’re thinking of purchasing a Morrish Home, why not ask us about our Move Assist scheme? If your current property is eligible for the scheme, our agents will work with you to sell your home at our cost.
This is optional but we highly recommend that anyone taking out a mortgage should also get themselves a good life insurance policy. If anything were to ever happen to you, your family would have a source of money though could rely on to cover any debt such as your mortgage payments. There are plenty of life insurance providers out there, so it’s worth doing your research to find the right deal.
Whether or not you hire a professional removals firm comes down to personal preference - and whether you have willing friends who could help instead! If you have a lot of heavy furniture to move or you’re relocating to a new town, it could certainly be worth paying for the services of an experienced removals company. Prices can vary, so it’s a good idea to shop around.
Searching for your perfect home? At Morrish Homes, we have a variety of beautiful homes for sale on our most prestigious developments across the South, including Poundbury in Dorset, Oakwood in Somerset, and Nansledan in Cornwall.
* Please note: There is currently a stamp duty holiday, which offers a tax break for anyone buying a property worth up to £500,000. You can find out more about this here.