Research has suggested that first time buyers aren’t realising just how many fees are involved when moving into a home and are being blindsided by unexpected fees.
Legal fees, insurance, bank transfer fees and mortgage set up costs are some of the biggest shocks for new buyers.
40.6 per cent of new home owners are hit unexpectedly with these kinds of fees, according to Pegasus Personal Finance.
Apparently 24.3 per cent of these first time buyers were unaware of land registry fees, 16.7 per cent were surprised by stamp duty land tax.
Furthermore, 13.5 per cent of homeowners asked, who were assumed to be those with a variable rate mortgage, said that they had not prepared for the hike in interest costs, should the Bank of England base rate increase from the 0.5 per cent it has been sitting at for a long time.
According to Money Advice Service, these unforeseen fees (not including Stamp Duty Land Tax) could cost almost £2,000.
This really shows how important it is to be on top of all the ins and outs of getting a mortgage, and fully understand what you are getting into.
Even costs not related to the home, such as car insurance, may increase if you move to a new area.
There is a lot to consider, which can make it ever difficult to get onto the property ladder for today’s ‘generation rent’. With so many people trapped renting or living with parents, it is more important than ever, if you are looking to become a homeowner, to take into account all the costs and make sure you are covered.
To this end, government schemes like the Help to Buy Equity Loan or Mortgage Guarantee can drastically reduce the amount needed for a deposit, leaving cash and savings to cover other fees.
