First Time Buyers: What’s The True Cost of Buying Your First Home?

The true cost for first-time buyers

There are a lot of costs that First Time Buyers might not necessarily be aware of when buying their first home. Let’s say we’re working with a First Time Buyer who’s looking to buy a £175,000, Leasehold, Semi-detached property. What are the costs involved?

What costs can First Time Buyers expect to face?

So as you can see from the video there are a lot of different costs that you need to know about as a First Time Buyer, including:

Ground rent – Regular payments (made annually) by a holder of a leasehold property to the freeholder of the property.

Lender’s fees – The fee really depends on the lender. In the example used in the video, the First Time Buyer paid a valuation fee of £200, an application fee of £199, and a product fee of £999. It’s important to remember that some mortgage products come without any of these costs.

Surveying costs –  The homebuyers survey gives you advice if you need to investigate resolve or repair any defects on the property that you’re buying. This can cost around £350-£400.

Solicitor’s fee – The Solicitor will be able to pick up on important information that isn’t visible. For example, if the property was flooded 3 times last Winter! The Solicitor is responsible for legally transferring the property over to you. Their fee typically costs around £1350 – £1500.

HMRC – Currently as a First Time Buyer you don’t pay any Stamp Duty on properties up to £500,000. This applies to properties purchased before the 31st of March 2021.

So overall, if you’re a First Time Buyer looking to buy a house at £175,000, you might need to budget for an extra £3348 worth of costs on top of your deposit. The costs will of course vary depending on your property price. According to Zoopla, the average cost of a First Time Buyer home is £220,000.

How can I plan ahead and make sure I have enough finances?

The best way you can prepare is to do your research long before buying, keep up with the property market changes as best as you can, and seek expert advice nice and early.

Warrington Mortgage Centre is here to offer you expert advice on your mortgage. Whether you’re a First Time Buyer or looking to remortgage, we are here to help. Visit our page dedicated to First-time buyers or Contact our friendly team today!

Disclaimer: As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

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