Understanding costs & fees

Buying a house is one of the most significant financial decisions you’ll make in your lifetime. Understanding the various costs and fees involved is crucial for budgeting and planning effectively.

Deposit: The deposit is a percentage of the property’s purchase price that you pay upfront to secure the purchase. It typically ranges from 5% to 20% of the property’s value, depending on your lender’s requirements and your financial situation.

Stamp Duty: Stamp duty land tax (SDLT) is a tax paid when purchasing property. The amount of stamp duty you pay depends on the purchase price of the property and whether you’re a first-time buyer or not. If you only own a house and are buying another one, you’ll pay a 3% surcharge on Stamp Duty.

Estate Agent Fees: If you are selling a property as well as purchasing one, you’ll pay an estate agent to sell your house. Fees typically range from 1% to 3.5% of your sale price. Some agents offer flat fees. Only the seller pays the estate agent’s fee so if you don’t have a house to sell, you won’t pay this fee.

Legal Fees: Legal fees cover the cost of hiring a solicitor or conveyancer to handle the legal aspects of the property purchase. They include services such as conducting searches, reviewing contracts, and facilitating the transfer of ownership. We will help you to find a competitively priced solicitor to complete this work for you.

Valuation Fee: A valuation fee is paid to the mortgage lender to assess the value of the property you intend to purchase. This fee is usually paid upfront and is non-refundable, even if the sale falls through. Sometimes lenders will offer free valuations as a benefit on their products.

Surveyor’s Fees: Surveyor’s fees cover the cost of hiring a surveyor to conduct a thorough inspection of the property. The survey helps identify any structural issues or defects that may affect the property’s value or your decision to proceed with the purchase. We will help you find a competitively priced, professional surveyor.

Mortgage Fees: Mortgage fees include various charges associated with obtaining a mortgage, such as arrangement and booking fees. These fees vary depending on the lender and the type of mortgage product you choose. We will incorporate any mortgage fees into our mortgage illustrations so you understand the true cost and value of any product. You will also pay an advice fee to your mortgage advisor. At Faulkner O’Connell, there are no upfront costs and an advice fee only becomes payable on your receipt of a mortgage offer. Get in touch for more information.

It’s essential to budget for these upfront fees and factor them into your overall homebuying expenses. Working closely with a mortgage advisor and solicitor can help you understand the full extent of the costs involved and ensure that you’re financially prepared for the homebuying process. By planning ahead and considering all upfront fees, you can navigate the homebuying journey with confidence and peace of mind.