Venturing into property ownership for the first time may be a daunting experience. It involves more than merely exchanging cash for keys and settling into your new home. The path to owning a home often involves numerous unexpected expenses that can substantially increase your investment. Hence, it’s prudent to set aside money to fund these unexpected charges.
Choosing a mortgage requires careful deliberation to avoid unwanted financial burdens. Some lenders may offer 100% loans that can seem attractive, but beware, these are often loaded with higher interest rates. Where possible, aim to provide a 5% or 10% down payment.
The term “Stamp Duty” might seem confusing, but simply put, it’s a tax charged on property purchases. You don’t have to pay anything for properties valued up to £60,000. However, beyond that limit, the percentage of stamp duty escalates based on the property’s price.
Investing in a basic survey to identify potential issues with a property is a smart move. Although the £300 cost might discourage some, some mortgage lenders may offer this service free of cost. Liabilities for a full structural survey could escalate to £800 or more, particularly for larger properties. The survey can expose less pronounced faults, which could prove costly over time.
If the survey detects defects, this places you in a strong position to negotiate a price reduction. Moreover, the rigorous nature of a complete survey provides a legitimate case for legal action if the surveyor overlooks significant issues.
Property valuation, though quick, is crucial to confirm that the property’s price is fair. Occasionally, mortgage lenders may offer free valuations. If it doesn’t, valuation fees should be less than £150.
Legal matters associated with property transactions, called conveyancing, are handled by property solicitors. They conduct local authority checks and manage Land Registry requirements. When selecting your solicitor, in the absence of personal recommendations, it’s advisable to gather several quotes to make an informed choice.
Conveyancing costs vary, typically based on the property’s price, and you should be prepared for additional charges like stamp duty and Land Registry fees. You can consider handling conveyancing by yourself, but it’s typically taxing and time-consuming.
Once the contract is finalized, a deposit is mandatory, usually equating to 10% of the property’s value. However, for 100% mortgage holders, this sum is typically covered by the lender.
