Buying a house is a major life milestone. It’s often regarded as the ultimate culmination of all the hard work and accomplishments you’ve undergone through the years because of its sheer size and scale.
While the dream of living in a house you can call your own can make anyone feel giddy with excitement, it’s important to keep your feet on the ground. The purchase price of a property is perhaps one of the steepest expenses you’ll have in the next decade.
On top of that, you’re also expected to pay off any hidden charges associated with homeownership. This can total anywhere between 5 to 10% of the house’s property value, so it’s not something to take lightly either.
Forget the mortgage fee and the downpayment for just a moment. If you want to gain more intimate knowledge on hidden costs, here are some you need to know about when buying your home.
Purchasing property is more than just looking at the pictures online and making a decision right then and there. It involves a close inspection and assessment of both the functionality and condition of the home itself. This way, you’ll not worry about potential troubles down the line regarding your home’s condition state.
As such, it’s critical to call in professional agents who know how to inspect your home and evaluate its condition thoroughly. They can tell you anything you need to know about whether the property’s estimated value is reasonable, breaking down everything from the state of the plumbing of the house to the structural integrity of the building’s foundation.
While this fee is not directly attached to the cost of ownership, it’s an important investment that should be heavily considered for the sake of your future home.
A conveyancer is a licensed professional who’s equipped with both the knowledge and skill of the legal aspects of buying and selling real estate. These experts are trained to arrange the acquisition and sale of the property legally and fairly.
If it’s your first time riding the journey of owning a home, hiring a legal expert is a fantastic way to ensure that all the knots are tied up neatly. There are a plethora of legal documents that you’ll need, and missing any of them can be a massive problem down the road.
In particular, these specialists help conduct title searches, property inspections, contract rate preparation, and settlement costs. That said, these professionals aren’t solicitors. They’re not able to defend or fight for your case in court. So be sure not to mix up the two when searching for legal representation.
Loan Application Fee
Most people don’t have the cash value of a house just sitting in their bank accounts. If you fit that demographic, opting for a loan to finance your property purchase is an option you can consider.
Usually, the process involves paying off a loan application fee that covers the evaluation and processing of your documents. This fee can range from lender to lender, so it’s important to vet your prospects to see which one works best for you. The loan you’re able to get is ultimately based on your credit history, income, and financial stability.
Everyone has different goals and visions of their dream home. Learn more about how much you need to save to acquire the home of your dreams.
Stamp duty is a tax imposed by the government to ensure that all property purchases are properly documented. This fee can range from a few hundred dollars to thousands depending on the location and price of your property.
Some fees from stamp duty may be reduced or even waived altogether. For example, people who have gained their property in a will or through a divorce proceeding are exempt from paying a partial to the full price of the stamp duty land tax.
You can also attempt to haggle the price of the property to a lower tax threshold, saving you a few hundred dollars in the process.
Mortgage Registration Fee
Another hidden cost that you need to prepare for is the registration fee connected to your mortgage. This is especially true if you’re applying for a loan from the bank and require their assistance in securing one.
The fee usually covers the cost of registering documents at the Land Titles Office and ensuring that all paperwork is properly filed. It also provides legal protection to the lender in case you default on your loan.
Transferring ownership and land registry can also be a costly affair. This fee is charged by the government for processing paperwork like title deed transfer and officially changing the name of the owner in their records.
This fee is something that changes depending on what region the property is located in. For instance, a house that costs £500,001 to £1,000,000 may be charged £655 as a transfer fee. A house that costs £200,001 to £500,000 would be charged £330.
Home and Contents Insurance Fees
Opting for insurance helps keep the value of your property intact in case accidents or unforeseeable events occur.
While the cost of this service varies depending on the amount and type of coverage you select, it’s usually the case that you’ll pay anywhere from a couple of hundred to one thousand dollars for home and contents insurance.
Make sure you read every detail on the policy before signing up so you know what your money is going towards.