Buying a house is never as straightforward as you might think. You actually need to save up a lot more than just your deposit, or the cost of the property if you are a cash buyer. There are plenty of hidden costs that you need to consider when trying to find the right place for you to live. Let’s take a look at some of the hidden costs of purchasing property that you need to think about before making an offer.
What Can You Actually Afford?
Many people tend to work out what they could purchase based on the deposit that they have saved up. Even by using a mortgage calculator, you can sometimes over- or underestimate what you have to spend.
Instead, it can be better to strip things back right when you decide you want to start saving for your property. By inputting your monthly income into an MSR, or mortgage servicing ratio calculator, you should be able to get a reasonable figure back of what you can afford to pay each month to your mortgage.
This means that you can be a lot more realistic about the type of property that you want to buy. Yes, many have a picture of their dream home in their head, but they might be further away from making that purchase. Work out what you can reasonably afford, and then try to buy something within this price range.
Stamp Duty
No matter where you are purchasing your home, you might run into the problem of stamp duty. This is a cost that you might have to face, and so you need to make sure that you are prepared for it. Not every property will face stamp duty as it has to meet a certain price threshold.
This threshold will vary depending on where you are buying, so you need to make sure that you pay close attention to it. You don’t want to get caught out and end up spending more than you thought you would! It is rare that a first-time purchaser will have to face stamp duty, but it is something that you need to make sure you do not get caught out by. You don’t want it to become a sudden issue that you have no choice but to face!
Lawyer Fees
There is a strong chance that you will have to use a lawyer or some other legal professional to help with the purchase of your property. Even the simplest of transactions can be quite difficult to fully manage, and you need to make sure that yours goes ahead as simply as possible.
Your solicitor is likely to be a key part of this. They will be available to advise you across various aspects of the purchase, and they may also be able to keep you right in terms of some of the other fees that you have to pay. Other than the actual purchase of the property, their services are likely to be one of the most costly parts of the property purchase. Therefore, you need to make sure that you are able to fully cover the costs of their services.
Ongoing Fees
There might be some costs associated with your property that will not end simply because your purchase is complete. You need to make sure that you are aware of these before making a bid on a property so you do not get caught out by heavy costs further down the line. Property upkeep is not cheap, and you need to make sure that you can afford the cost of the house plus its maintenance.
An obvious extra cost here is that of utilities. You need to make sure that you are able to afford the cost of the monthly bills. A big, expensive property is going to have many bills associated with it too. On top of this, you might have to sign a contract for extra services. For example, if you buy a unit in a serviced apartment building, you will need to pay a monthly fee to have access to them. You might also have to pay for certain renovation costs within the property too. It might be your dream home, but it might also cost a lot for you to get just right.
Buying a house and taking a step on the property ladder is a dream for many, but there is no denying that it comes at a great cost. This stretches far beyond the cost of the actual home itself, and it is something that buyers need to be aware of before they make that purchase. Take the time to find the right home for you, but also be aware of some of the other costs that are building up in the background.
