Financial Checklist Before Buying A Property In The Uk

When you’ve put money down for a deposit and have finally located a home that you believe you can afford, before going to the bank to apply for a mortgage, keep in mind the hidden costs that come with purchasing a home.

You’ll need to ensure that you have enough funds to cover these costs, as well as the deposit and monthly instalments. 

While buying a home in Barkingside, get in touch with estate agents in Barkingside, as they can give you a heads up on all the financial planning you need to make.

Comprehensive Checklist For Buying A House

Buying a house in the UK can be a difficult task. There are so many nuances that one needs to understand to make the right choice. 

A home is not something that you buy off the shelf. It is one of the most significant financial commitments some of you will ever undertake. 

Therefore, clearly understanding the nuances can help you with that endeavor. Thus, this section will look at a comprehensive checklist for buying a house.

Without further ado, let us dive right in!

Setting Finances Right

Before buying a house, you must start by rearranging and streamlining your finances. You cannot afford a home if you chomp at the bits. 

Therefore, start by listing all the essential expenses that you bear. This should give you a fair idea of the affordability. In other words, finding the right house that fits your budget is essential.

Therefore, before taking on this mammoth responsibility, consider your finances and set a checklist for buying a house accordingly. 

Admin Fee

A mortgage arrangement fee, which can be as much as 1% of the property’s value, is charged by some companies. 

Although most lenders have stopped charging mortgage indemnity costs, a handful still do if you have a high loan-to-value ratio — for example, if you only have a 10% deposit. 

This fee covers the expense of their insurance if you default on your loan. Some mortgage brokers impose a fee, which can range from a few hundred pounds to 1% of the loan amount.

Homebuyers’ Survey

Before you sign on the dotted line, you should get a professional survey of the property you’re buying. 

The cost of an essential RICS Condition Report ranges from £250 to well over £600 for a complete structural survey. If your property is in Ilford, then estate agents in Ilford can help you schedule a study.

Valuation

A valuation is similar to a survey but much more straightforward. 

Your mortgage lender will offer this to verify that the property’s price isn’t artificially inflated, as it is also their investment. 

Some lenders will do it for free, but a minor fee (typically under £150) may be associated with it. 

Also, seek the help of local estate agents; if you are buying a home in Romford, then estate agents in Romford can help you arrange a property valuation for your home.

Conveyancing

This is the legal component of the house sale, where the property is transferred from the previous owner to you, and a trained solicitor should handle it. 

Costs vary depending on the value of your home, but they often range from £800 to £1500.

Stamp Duty Land Tax

Stamp duty is a type of land tax that is levied on (SDLT). If the house costs £500,000, you’ll have to pay stamp duty (a tax on purchasing a property). 

For residences worth between £500,001 and £925,000, the rate is 5%. For residences worth between £925,001 and £1.5 million, the rate climbs to 10%.

Finally, stamp duty on homes worth more than £1.5 million is 12 percent. It’s calculated similarly to income tax, so you won’t have to pay anything on the first £500,000 of your home’s value, but you’ll have to pay 5% on everything above that. 

So, if the house you’re buying costs £650,000, you’ll have to pay a 5% tax on £150,000, or £7,500.

Insurance

Combining your mortgage with a life insurance policy is a good idea so your partner or family can handle your mortgage obligation if you pass away. 

Many mortgage lenders provide it as part of the loan, but getting it from a specialized insurance company is best. 

Another requirement, which you may not have considered if you’ve been renting up until now, is home insurance coverage.

Cleaning, Repairing, and Redecorating

Once you’ve moved into a new home, you’ll need to spend some money to customize the property to your liking. 

Changing the locks is usually a good idea, and having the carpets and stoves professionally cleaned can help you start over. You’ll also want to save money for painting and decorating goods to personalize your new house.

Fittings and Fixtures

You won’t have white goods or furnishings if you relocate from a rented property or your parents’ house. 

You can haggle with the sellers to keep some of their stuff, but check online first to ensure they’re not asking too much. Otherwise, set aside some funds to purchase your own.

The Expense of Relocating

If you’re relocating locally, you may expect to pay around £50-60 per hour if you employ a removal company. 

You could do it yourself for the cost of a van rental or gasoline in your car. Recruiting your pals to assist you with relocation could be as inexpensive as a couple of pizzas.

Postal Redirection

Accidents do happen, even if you’ve contacted your bank, job, and magazine subscription organizations. Royal Mail charges £33.99 for three months or £68.99 for a year to set up a mail redirection service.

And It’s A Wrap!

In summation, these are some of the points you need to remember if you want to create a checklist for buying a house. 

This checklist should be extensive and include all the hidden and direct costs you need to bear. 

However, you must remember that buying a house is a complex endeavor, and there is no telling what might happen. Therefore, be prepared for anything and keep some buffer cash as the cushion for uncertainty. 

Thank you, and have a great day ahead.

Additional Reading:

• How To Start The Process Of Buying A Home?
• The Ultimate Guide To Selling A House At Auction
• Your Comprehensive Guide To Navigating The Home Buying Process