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Being a first-time buyer is an exciting time. Finally, you’re getting the chance to get on the property ladder and live in a home that you own. But before you can get there, there’s a big old deposit to save up first. A deposit, and lots of other costs you might not have thought about while saving for your first house.
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To help you prepare to buy your first home, here are all of the costs you need to save for to help you get your foot in the door.
The deposit will be your biggest expense when buying a house, and it could take years for you to get there. Many banks will lend to buyers with just a 5% deposit, however, you’ll be in a better position if you can aim for 10 or 20%. There are several schemes available at the moment to help first-time buyers, including Help to Buy, the Help To Buy and Lifetime ISAs, shared ownership and more. These could help you save your deposit quicker or help you to buy a bigger home.
There’s no way of getting around solicitor’s fees, unfortunately, and they can cost up to £1,500 when buying your first home. It’s good to choose from a range of solicitor firms to get a quote that suits you. Be prepared to pay for search fees, surveys and more as you go along, which your solicitor can arrange for you.
Mortgage application fees
That’s right, sometimes you have to pay to apply for a mortgage! Many mortgage types come with a fee attached to them, but for first-time buyers, there are often cashback deals to take advantage of. It’s worth going through a mortgage broker to help you find the best mortgage deal for you – many of whom will take their fee from the lender, rather than from you. Make sure you check out the steps you should take before you apply for a mortgage to ensure everything is in hand.
Stamp Duty is a tax that is paid on all homes, and can add thousands to the cost of buying your first home. There are reliefs available to first-time buyers, provided you’re buying a house worth under £300,000. You’ll most likely pay Stamp Duty on completion, but it is due within 30 days of completing your house purchase.
When you’ve paid all of the necessary payments, you’ll also have to think about costs associated with moving house. Hiring a van or a removal company can cost £100s, and you’ll need to think about buying all of the packing materials too.
As a first-time buyer, it’s likely you’ll have little furniture of your own. You might also have to factor in the cost of flooring and kitchen appliances if these need replacing. It’s possible to furnish your home on a budget, and there are also some great interest-free credit options available to you too.
Remember that you don’t need to have all of your furniture straight away – you can build things up bit by bit.
Buying a house comes with many costs attached to it, but it’ll be worth it to own your own home. Cut back on your spending and keep your goal in mind to help you reach your savings target quicker so that you can get your hands on those keys!