Do you know the full cost of buying a home?
Here are some expenses you will have to keep in mind.
The cost of your property isn’t the only price you see on in the estate agents window. For example, a lot of buyers, especially first-timers, go over budget on the purchase of their house simply because they haven’t factored in stamp duty.
This means if you have a property to let in Liverpool, you’re in a strong position, as prospective buyers simply wouldn’t be able to afford the full cost of buying a property… particularly first timers.
Here is what a buyer needs to think about;
Costs vary with this one. It’s a postcode lottery, the same city and depending on your property could mean you pay as little as £170 or as much as per £700
You probably won’t be able to get a mortgage without having it, or at least having the intention too.
To keep costs down;
- Shop around
- Consider switching from your mortgage company to a general insurance provider;
- Use a good broker that will shop around at renewal time for competitive quotes;
- Fit high-quality locks on exit doors and windows;
- Fit a smoke alarm and insurer-approved burglar alarm;
- Join your local Neighbourhood Watch scheme;
- Keep valuables to a minimum.
Stamp duty is a tax levied by the government on the transfer of properties. Depending on the cost of your property this will be a big one;
- 1%: Properties of £125,000 to £250,000, but first-time buyers are exempt until 24 March
- 3%: £250,000 to £500,000
- 4%: More than £500,000
- 5%: More than £1m, residential property only
If the purchase price of your house is less than £125,000 you won’t need to pay stamp duty.
Obviously these costs are subjective, but we all know that a bed alone can cost over £1000 and the same for a couch. If you haven’t budgeted, you’re new property could look really really minimal.
You don’t have to buy your furniture all at once, but I’d imagine a minimum of £10,000 to have a standard amount of furniture and fittings.
If you have a few houses to let Liverpool, you’ll be very aware already of the moving costs. Few people realise that estate agent’s fees can be massive! I’ve heard of fee’s as much as 6% of the value of the property. Remember these are open to negotiation and can vary between 1% and up to 3% of the purchase price, depending on where you live and the state of the market in your area.
Actually moving will incur costs, and some of you may need a storage solution. You’ll need to be proactive in adding these costs to your budget.
Expect to pay solicitors fees of around £550 for a house with a purchase price of £100,000.
So if you want to have a regular income and you have a property available to let, you’re in a very good position.