There are many costs associated with buying a property, the first step is to know your finances complete a budget planner so you can estimate your affordability each month to make the mortgage repayments and other associated costs.
Apart from the deposit which will be at least 5% of the purchase price of the property there are other costs involved when buying a property. Whilst 5% is the minimum deposit putting down a greater deposit will give you access to better interest rates.
Mortgage Broker Fees – Some mortgage brokers charge a professional fee for their service. They carry out research from different products/rates that are available in the marketplace. Always make sure you ask upfront if there are any charges, you don’t want to get a surprised with an unexpected bill.
Valuation Fee – This fee is charged by your mortgage lender, the lender appoints a valuer to determine the property value as part of their assessment of the amount they can lend against the property. The cost of the valuation can differ between lenders, some will require you to pay it upfront and others may allow you to add it to the mortgage.
Rate Booking Fee – There may be booking fee associated to the particular mortgage interest rate you choose. Make sure you check with the mortgage lender if this cost has to be upfront or is added to the amount borrowed. Remember if it is added to the amount borrowed it may end up costing you much more over the term.
Surveyors Fee – If you are concerned about the condition of the property and want to get a more in-depth report before committing you may want to appoint a surveyor. The surveyor can provide a report on any structural, damp, mould etc. We recommend that you use a RICS qualified Surveyor, this means that the surveyor is accredited through the Royal Institute of Chartered Surveyors.
Solicitors Fees – You will need a conveyancing solicitor to carry out all the legal aspects when purchasing a property and also carrying out land registry searches. Prices can vary so make sure to get a view different quotes.
Stamp Duty – This is a property tax which is paid on properties over £125,000 when you buy a property in the UK, the amount of the tax charge varies on the value of the property and is subject to change. For First Time Buyers in Northern Ireland there is no stamp duty on the first £300,000, however the property must be your main residence and the cost of the property must not exceed £500,000.
Buildings Insurance – It is a condition of a mortgage that you must have adequate buildings insurance in place. This insurance does not have to be taken through the mortgage provider however it must be in place for completion of the house purchase. This protects the mortgage lenders security over the property. You may also want to cover your belongings in the property by taking out Contents Insurance.
Other Insurance – Other types of Insurance such as Life Cover, Critical Illness Cover, Income Protection whilst are not necessary for you to take offer peace of mind. It is important to get the right advice from an expert in this field.
Rates – This is another property tax based on the value of the property. Rates can be paid annually or monthly to Land & Property Services and these contribute to public services in Northern Ireland.
Ground Rent / Service Charge – Ground rent is payable if the property is leasehold. Although you might own the property the land on which it is built could be leased. Typically a lease can be up to 999 years. The annual charge to the leaseholder is known as Ground Rent. When you are purchasing a property your solicitor will be able to tell you the details such as is the Ground Rent up to date and who it is paid to. Service Charges can apply when the property purchased is in an apartment block or development. Typically this charge covers maintenance and upkeep of communal areas and is paid to the management company, there should be a contract in place outlining the fees and what they cover.
Maintenance/Furniture – You should budget for these costs, the property may require updating, diy, repairs, decorating and gardening. Some of these costs may not be regular however you should still allow for these in your expenditure.
Utilities – The amount you spend on bills such as gas, electricity, oil, broadband, telephone and tv packages can vary. It is also important to take into account that the heating bill in the winter can be greater than in the summer months. Don’t be afraid to shop around and get the best deals!
