Are you interested in buying, selling or renting property in Lancing or Sompting?
Neville Scott Estate Agents are an independent local Estate Agent in Lancing specialising in residential sales and investment lettings. We pride ourselves on offering a friendly and professional service where the client ... Read more
Home
Handy Tips
Buyers Guide
UK Property List
Property News
Mailing List
Local Services
Contact Us
Telephone: 01903-767788
Property Abroad
How much can you afford?
You have decided that you are going to buy a property, but on top of the cost of the home itself, there are many other, one-off expenses involved in buying a home & moving which can add up from £2,000+.
In order to get a good idea of what sort of home you can realistically afford, you have to take these extra costs into account. To help you do your sums, here is a guide to working out how much money you have to spend and what the costs are.
How Much Can I Borrow?
Before looking at properties, you should consult an independent financial advisor, mortgage adviser or lender as to what your maximum possible loan would be. This will be based on the size of your deposit, how much you earn, other loan commitments and sometimes affordability.
When considering mortgages, there are 3 levels of service that are laid down by The Mortgage Code:
• advice & recommendation on which of the mortgages they can provide is most suitable for you:
• information on the different types of mortgage product on offer so that you can make an informed choice of which to take: or
• information on a single mortgage product only, if only one mortgage is available or if you have already made up your mind.
Which advisor?
You could approach several lenders direct but, apart from the time spent doing this, each can only ‘advise’ on their own products & rates.
If you opt for an independent financial advisor check if he/she has the time and facilities to source a mortgage that is right for you and guide you through the buying process.
You could consider appointing an independent mortgage advisor that specialises in arranging mortgages. After all, they deal with mortgages every working day and should help you to choose the right mortgage for you and guide you through the buying process.
Do-it-Yourself? You could, but make sure you know in detail exactly what the product on offer is, the fees involved, the terminology and the process. Remember, it could be frustrating and expensive to be turned down for a mortgage, or switch lenders half way through!
The Fees.
Arrangement Fee. A fee charged by lenders to cover the cost of setting up the mortgage. Some lenders waive this fee.
Lender's Valuation (Basic Valuation). All lenders require a valuation of the property to check that it is worth the price being paid for it. This is commissioned by the mortgage lender but you must cover the cost. The cost of the valuation depends on the value of the property – for example, allow about £125 for a property worth £50,000, £165 for a £100,000 house and so on. Some lenders do not charge this fee, as an incentive for you to take out a mortgage with them.
Survey. The Lenders require a Mortgage Valuation/Survey but you may want a more detailed survey carried out to check for any defects. There are two other types of survey, the Homebuyer's Report which costs between £250 and £500, and the more comprehensive Buildings Survey (Structural Survey) which can cost anything up to £1,000 plus. VAT, depending on the value of the house. Allow extra if you need more specialist checks, eg. timber treatment, drain check, etc.
Legal/Conveyancing Fees. You will need to hire a solicitor to deal with the legal aspects of buying a property. There is no standard fee so it is a good idea to shop around for the best rate. Some solicitors charge a flat rate while others charge a percentage of the property price, normally up to 1 per cent. As well as the price of your house, the fee will take into account factors such as the amount of paperwork involved, how much skill is required and how complicated the transaction is. You will also have to pay for the legal work done by your lender's solicitor. Again, prices vary so ask your lender how much they charge. If you use the same solicitor as the lender to do your conveyancing this may save you money, but compare charges with other firms. Once again, Neville Scott is able to help by providing you with quotes from their on-line database. All the solicitors on the database operate on a No Sale-No Fee basis in case the sale/purchase falls through. Most of the legal work can be transacted by post so there isn't a need to appoint a local solicitor.
Stamp Duty. This is a government tax, charged for properties above £60,000. If your new home is priced between £120,000 and £250,000, you will pay 1% of the property price. From £250,000 to £500,000, it will be 3% and over £500,000 it will be 4%.
Land Registry Fee. The Land Registry is a government department which looks after the registers of all registered properties in England and Wales. It charges a fee for transferring the register to the new owner. This fee is charged according to property price. Price (£) Fee (£)
up to £40,000 £40
£40,001 – £70,000 £60
£70,001 – £100,000 £100
£100,001 – £200,000 £200
£200,001 – £500,000 £300
£500,001 – £1,000,000 £500
£1,000,001 and over £800
Local Authority Search Fees.
Local searches will be carried out by your solicitor/conveyancer to ensure that there are no potential problems such as planning permission on neighbouring properties or plans for new roads nearby.
You have decided that you are going to buy a property, but on top of the cost of the home itself, there are many other, one-
In order to get a good idea of what sort of home you can realistically afford, you have to take these extra costs into account. To help you do your sums, here is a guide to working out how much money you have to spend and what the costs are.
Before looking at properties, you should consult an independent financial advisor, mortgage adviser or lender as to what your maximum possible loan would be. This will be based on the size of your deposit, how much you earn, other loan commitments and sometimes affordability.
When considering mortgages, there are 3 levels of service that are laid down by The Mortgage Code:
• advice & recommendation on which of the mortgages they can provide is most suitable for you:
• information on the different types of mortgage product on offer so that you can make an informed choice of which to take: or
• information on a single mortgage product only, if only one mortgage is available or if you have already made up your mind.
Which advisor?
You could approach several lenders direct but, apart from the time spent doing this, each can only ‘advise’ on their own products & rates.
If you opt for an independent financial advisor check if he/she has the time and facilities to source a mortgage that is right for you and guide you through the buying process.
You could consider appointing an independent mortgage advisor that specialises in arranging mortgages. After all, they deal with mortgages every working day and should help you to choose the right mortgage for you and guide you through the buying process.
Do-
Arrangement Fee. A fee charged by lenders to cover the cost of setting up the mortgage. Some lenders waive this fee.
Lender's Valuation (Basic Valuation). All lenders require a valuation of the property to check that it is worth the price being paid for it. This is commissioned by the mortgage lender but you must cover the cost. The cost of the valuation depends on the value of the property – for example, allow about £125 for a property worth £50,000, £165 for a £100,000 house and so on. Some lenders do not charge this fee, as an incentive for you to take out a mortgage with them.
Survey. The Lenders require a Mortgage Valuation/Survey but you may want a more detailed survey carried out to check for any defects. There are two other types of survey, the Homebuyer's Report which costs between £250 and £500, and the more comprehensive Buildings Survey (Structural Survey) which can cost anything up to £1,000 plus. VAT, depending on the value of the house. Allow extra if you need more specialist checks, eg. timber treatment, drain check, etc.
Legal/Conveyancing Fees. You will need to hire a solicitor to deal with the legal aspects of buying a property. There is no standard fee so it is a good idea to shop around for the best rate. Some solicitors charge a flat rate while others charge a percentage of the property price, normally up to 1 per cent. As well as the price of your house, the fee will take into account factors such as the amount of paperwork involved, how much skill is required and how complicated the transaction is. You will also have to pay for the legal work done by your lender's solicitor. Again, prices vary so ask your lender how much they charge. If you use the same solicitor as the lender to do your conveyancing this may save you money, but compare charges with other firms. Once again, Neville Scott is able to help by providing you with quotes from their on-
Stamp Duty. This is a government tax, charged for properties above £60,000. If your new home is priced between £120,000 and £250,000, you will pay 1% of the property price. From £250,000 to £500,000, it will be 3% and over £500,000 it will be 4%.
Land Registry Fee. The Land Registry is a government department which looks after the registers of all registered properties in England and Wales. It charges a fee for transferring the register to the new owner. This fee is charged according to property price. Price (£) Fee (£)
up to £40,000 £40
£40,001 – £70,000 £60
£70,001 – £100,000 £100
£100,001 – £200,000 £200
£200,001 – £500,000 £300
£500,001 – £1,000,000 £500
£1,000,001 and over £800
Local Authority Search Fees.
Local searches will be carried out by your solicitor/conveyancer to ensure that there are no potential problems such as planning permission on neighbouring properties or plans for new roads nearby.
