We’re all aware that in order to buy a house you should save up. But once you’ve decided on your budget and what percentage deposit you’re working towards, how much extra does a first time buyer need to have on hand?
These figures are what I paid, in order of when I paid them – your mileage may vary. I was a first time buyer, purchasing a £230,000 house in England with a 75% mortgage, if this sounds similar to you, then I hope this might give you an idea.
- 1 Mortgage valuation
- 2 Mortgage arrangement fee
- 3 Searches
- 4 Survey
- 5 Conveyancing
- 6 Buildings and contents insurance
- 7 Van hire
- 8 Total
- 9 What did I avoid paying?
£248 (11th of May 2018)
After we’d received our mortgage in principle, and had an offer accepted on our property we had to pay £248 to Natwest so that somebody could go to the house and check it’s worth what we’d agreed to pay for it.
All we heard back after this was just yes, it’s worth the money. You don’t get a report sent to you or anything. It kind of felt like flushing £250 down the loo, but for most mortgages you don’t really have a choice but to pay for it.
Mortgage arrangement fee
£995 (23rd of May 2018)
It’s quite common for a mortgages to include fees. Obviously, I’d prefer not to pay them, but it can be worth it to secure a lower interest rate, and actually work out cheaper in the long run. Now, I chose to pay this up front, but you don’t have to. They did give me the option to add it to my mortgage, but doing that would a) mean I’d be paying back even more in interest, and b) change the percentage loan to value on the mortgage to take me over 75%, meaning the interest rate for my five year fix would actually go up.
It was a little bit of a pain to explain to my broker that I wanted to pay it upfront, but doing it has saved me thousands.
£185.25 (paid to my conveyancer on the 16th of June 2018)
This is a standard price to check legal things like whether you’re connected to the water mains and if the people you’re buying your property from actually own it. You have no choice but to pay this, and it’s all good information to know.
£390 (12th of July 2018)
I chose to get a homebuyers report from a local surveyor I found on the internet. I think the surveyor did a good job, and was happy to answer questions and look in depth at specific parts of the house I was worried about, but I found the final report a bit mystifying.
There was a lot of “this might become a problem” or “it wasn’t raining so I couldn’t tell if there was drainage”, basically, it was vague to say the least.
In the end it did help us negotiate £2,000 off the sale price to cover work we didn’t know needed doing, so it was worth it. I wouldn’t go into it expecting unmistakably clear answers on the condition of the house you’re buying, though.
£520 for his fees + £170 for more searches (paid on the 12th of September 2018 – 2 days before completion)
Finding a solicitor (also known as a conveyancer) was one of the most daunting tasks early on in our house purchase. I don’t have a solicitor, I’m not a criminal! Can I be appointed a public defender, preferably someone from The Good Wife?
Yeah, no. You have to pay for a conveyancer. First of all I looked on a solicitor comparison site – which is a thing, apparently – and they were coming up cheap, maybe worryingly so. They all seemed to be really far away from us, and the companies suggested to us had horrible reviews online. So I changed tactics and asked in a local Facebook group if anyone had any recommendations. I got quite a few and emailed them all for quotes, and they came back as more than double the cost of the comparison site people, but they did have good reputations.
What a dilemma!
So, I did what any snowflake millennial would do, and called my mummy for advice. She’d recently sold her house, and had used someone local to her (which is still 2.5hrs away from us) who was just one man, working from his home office. She told me because he’s a small business and not a large law firm, he isn’t VAT registered, which automatically made him 20% cheaper. I called him up and ask if he’d be willing to go long distance with me, and got a quote. He told me it really doesn’t matter where I was, as long as I was in England or Wales, and we could do it all over post/email.
He wasn’t quite as cheap as the comparison site people, but almost, and as my mum had used him before I put my trust in him and went ahead.
You pay your solicitors fees when you transfer the final bit of your deposit over to them before the completion date.
Buildings and contents insurance
£166.28 (14th of September 2018)
Your mortgage paperwork will probably say you need to have at least buildings insurance, in case your house falls down. You don’t have a choice, sorry!
£8 (13th of October 2018)
I got a great deal with Zipcar (which I’ll write about later), but remember to factor in actual moving costs to the money you plan on saving ready for your house purchase.
What did I avoid paying?
So, what do you think? MoneySuperMarket say you should budget between £2,950 and £6,400 for moving costs as a first time buyer (not including your deposit or stamp duty). However, as one of those figures is more than double the other, I thought it would be helpful to see what someone who is actively looking for the best deal on everything actually paid.
Just a note – some of the bills that come up in lists like this one from The Money Advice Service that I didn’t pay are:
Broker fees (can be around £200-£300)
I used Habito [refer a friend link, we both get £100] as my mortgage broker, and they don’t charge a broker fee. My mortgage is comparable to the best available at the time, too! If you go with a more traditional mortgage broker then you may be faced with an upfront fee.
Electronic transfer fee (typically £40 – £50)
I’m not sure why this never came up for us, it’s possible my solicitor factored it into his fee, or just the way we paid our deposit meant it wasn’t necessary.
Holding deposit (could be £500 – £1,000)
This only applies to new builds, usually. It’ll be taken off the total price of the property once you complete, but it is an upfront cost you should budget for. My house is a rickety Victorian terrace, so no holding deposits for us!
I hope this list was helpful, but as with everything, do your own research and get your own quotes. If in doubt, save up more than you’re going to need – you won’t regret it!
Me and my boyfriend are both first time buyers, so we didn’t have to pay stamp duty. This is a bill you need to pay for up front. For my house it would have cost us £2,100 if the law hadn’t changed recently. If either you or the person you’re buying with have owned a home before, or the property costs more than £300,000 you can use this Stamp Duty calculator to work it out.
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