Budgeting for Buying a Property Solicitors York, Wetherby & Malton
Before buying a home you should investigate the costs involved to help you budget.
There are the obvious costs of household bills but there are other costs to be aware of these include:
We will deal with the legal side of your purchase, which will usually include the mortgage lender's legal work. We will charge fees for the work carried out which will be subject to VAT. In addition to our own fees there will be disbursements payable for things such as searches and Land Registry fees.
We are unqualified to comment on the structural integrity of the property or any works required to the property. A surveyor should be instructed to carry out a survey in order to give this information. There are different types of survey which can be carried out as follows:-
- Homebuyers' Report
A homebuyers' report is not a full structural survey but in most cases will be sufficient.
- Full Structural Survey
A full structural survey is a comprehensive report which will reveal major and minor defects in the property. The list of minor defects can sometimes be extensive but you should remind yourself that this is after all a comprehensive survey. This type of survey is often recommended for older properties or any property known to lie within an area at risk from problems such as flooding or subsidence.
- Valuation Survey
If you require a mortgage your lender will carry out a survey of the property for their own valuation purpose. This will not provide any comprehensive information regarding the property and you should consider whether you also require one of the other types of survey.
A 10% deposit will be payable when Contracts are exchanged. The deposit will need to come from your own funds (this cannot form part of the money being borrowed under a mortgage, if any, being taken over the property). Sometimes a reduced deposit will be accepted by the sellers. The deposit will only be refunded to you in exceptional circumstances.
Stamp Duty Land Tax (or SDLT for short) is a government charge payable on purchase transactions only. The amount payable depends on the value of the property. The fee will be sent to Inland Revenue once completion of the purchase takes place.
These are payable when making your mortgage application. They can be to book a particular product such as a fixed rate of interest or be administration charges levied by the mortgage advisor, bank or building society in setting up the mortgage.
Furnishings and Contents
If you are a first time buyer you will need to budget for all of the essentials required to live in your new home taking into account any items included in the sale price as detailed in the Fittings and Contents form completed by the seller. Even if you already own a property you may need to budget for items required for your new property. You may also need to budget for carpets and curtains.
Repairs and Decorations
You will no doubt wish to make your own mark on your new home and you should budget for minor redecorations you may wish to carry out as well as any renovations which may be more costly.
Insuring the property
Once Contracts are exchanged the responsibility for buildings insurance for the property will pass to you.
You should ensure that you have your buildings insurance policy ready to put in place as soon as we confirm Contracts have been exchanged. The sum insured should not be less than the minimum rebuild value shown in your mortgage offer and should cover any risks specifically referred to by your mortgage lender.
Insuring yourself is just as important as insuring the property. If the worst were to happen and you were unable to continue to make your regular mortgage payments, by having insurance in place you do not need to worry where the money will come from.
- Life Assurance
Life assurance is important when you take out a mortgage as if the worst were to happen the mortgage will be repaid in full and your surviving family will not have to worry about meeting the mortgage payments.
- Accident or Critical Illness Cover
Critical illness cover will ensure that your mortgage is repaid in full in the event that you had an accident or were taken ill with a life threatening illness. Such policies usually pay out a lump sum amount upon assessment of your injuries or diagnosis of a number of conditions. This will then ensure that the mortgage would be repaid.
You may want to arrange cover that would pay your mortgage instalments if you lost your job.
NB. This is intended as a guide only and you should feel free to ask us any questions about the process or the property that you are unsure of.
Solicitors for Buying a Home in Yorkshire
The residential property team at Ware & Kay can provide clear, jargon-free legal advice. Whether you are a first-time buyer or experienced property investor, our lawyers are on hand to guide you through every stage of the conveyancing process. With over 200 years advising clients in Yorkshire, Ware & Kay solicitors are ideally placed to assist you. Call us today on 01904 716000 (York) or 01937 583210 (Wetherby), or complete our online contact form.