7 Hidden Costs of Owning & Buying A Home
Whether you have recently become the owner of a house that has been passed down to you by a deceased loved one or you have purchased a probate property yourself, it is important to prepare yourself for many of the less-publicized costs of home buying and ownership.
Here are just seven of them.
1. Stamp duty
This can be an especially hefty expense, adding as much as 7%, or thousands of pounds to the cost of a home. The Money Advice Service has published a useful comprehensive guide to stamp duty, which is payable on homes costing more than £125,000.
This essential legal process involved in the purchase of a property, encompassing such elements as searches and Land Registry registration, varies depending on the value of the property that you wish to buy, as well as the searches that you have done.
Consult the HomeOwners Alliance's guide to how much conveyancing fees should cost for a more detailed breakdown of the likely fees.
3. Additional mortgage fees
Mortgage companies may charge you a couple of hundred pounds or 1% of the mortgage in 'arrangement fees', which can work out to be a very considerable expense. You may be required to pay these fees as part of the mortgage, or expected to fork out for them up front.
If you have a high loan-to-value (LTV) ratio, you may also be charged mortgage indemnity fees, which cover the insurance the lender takes out in case you are unable to make your repayments.
Some people also use mortgage brokers to scour the market in search of the best deal, and may be charged a few hundred pounds or up to 1% of their mortgage for this service. However, this shouldn't be seen as an inevitability, as some brokers are free to use.
4. Surveys and valuations
These can add just a few hundred pounds to your home's purchase price, or well over £1,000, depending on the type of survey that you have and the property's value.
5. Water, gas and electricity bills
It's almost impossible to avoid these costs, which can amount to several hundred pounds a month for larger properties. You may therefore appreciate this advice from UKPower.co.uk on how your electricity and gas usage can be reduced, thereby slashing your bills.
Many people choose to buy a house further away from their place of work to reduce costs, only for such savings to be lost given the extra travelling required - whether they own and drive their own car or make use of public transport. Season tickets can cut the expenses associated with the latter.
You might be fortunate enough to buy a property with its own driveway or garage, or you may need to park on the street - in which case, a residential parking permit may be required. This can cost between £25 and £100 a year, depending on the number of cars you have.
To learn more about the buying and selling of probate properties, including the costs that you may incur, please consult our informative Frequently Asked Questions (FAQs) page here at Probate Purchasers.