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First time buyer costs: Everything you need to know

Buying your first home is exciting but there’s a lot you’ll need to think about including what first time buyer costs you'll need to pay. By doing your research early such as by finding out if you'll need to pay for things like stamp duty you'll be able to plan better. That’s why we’ve put this article together to explain everything you’ll need to know. Plus we’ll explain how you may be able to give your savings a major boost by taking out a Lifetime ISA. And we’ll also tell you about the schemes available to first time buyers designed to help you get on the property ladder if money is tight. Here goes…


First time buyer costs: What do I need to pay?

First time buyer Stamp Duty

So with first time buyer stamp duty how much will you need to pay? The good news is your Stamp Duty bill may be a lot lower if you’re a first time buyer and you might not need to pay it at all. This is because as a first time buyer you won’t pay any Stamp Duty on properties worth up to £300,000. While if you're a first time buyer purchasing a property for between £300,001 and £500,000, you won’t pay any Stamp Duty on the first £300,000. And you’ll pay 5% on the portion between £300,001 to £500,000. However if you’re a first time buyer and purchasing a home for more than £500,000 you’ll pay the standard rates of Stamp Duty. So use our calculator to find out how much your first time buyer stamp duty will be. (*Do we need to say These figures apply to England and Northern Ireland only?)


What about a survey?

Buying a property is expensive so you might wonder whether it’s worth spending any money on a survey? But major structural problems can be tricky to spot unless you’re a trained professional. So having a survey carried out might cost you some money during the buying process but it could save you a significant amount of cash if the survey uncovers expensive problems before you buy the property. There are different types of surveys which will go into different levels of detail. When you book your survey you should expect to pay from £300.


Legal fees

When you’re buying a property you’ll need a solicitor or licensed conveyancer to handle the legal work so you’ll need to factor in this cost too. Conveyancing fees generally cost between £400 and £1,500 when you’re buying a property. And you’ll also need to pay for searches (typically around £200 to £450), Land Registry fees (this varies but could be several hundreds of pounds). Plus you’ll also need to pay bank transfer fees too (usually around £25 to £50).


Mortgage costs

When you’re choosing your mortgage you’ll find some products charge fees like an arrangement fee and these might seem quite high. But when you’re comparing mortgages don’t only look at the fees you’ll need to pay. Sometimes mortgages with high arrangement fees can work out cheaper overall if they offer a much better rate. However this isn’t always the case. But don’t worry about doing the maths yourself. When it comes to first time buyer mortgages this is where our team of expert advisers can help you by crunching the numbers for you. Also in some cases you can add this fee to your mortgage, although if you do this it will increase the amount you owe, your interest and your monthly payments.


Valuation fees

When you apply for a mortgage the lender will want to commission a mortgage valuation to confirm the value of the property. The amount the mortgage valuation will cost you will vary depending on factors including the property’s value but it can be from £100 to over £1,500. However some lenders won’t charge this fee on certain mortgage deals.


Moving costs

And make sure you factor in the costs of moving too. If you don’t have much bulky furniture could you move all your possessions yourself or with the help of family or friends? This will be much cheaper than hiring a van or booking a removals firm.


What first time buyer help is available?

But if this list sounds rather long and expensive try not to be too alarmed because there is help available!


Boost your first time buyer deposit

You can give your first time buyer deposit a helping hand by opening a Lifetime ISA if you’re eligible. They’re for those aged 18-39 years old and are for buying a first home or for retirement. You can put in up to £4,000 a year until you’re 50. And you’ll get a 25% bonus on your savings of up to £1,000 a year. However there are terms and conditions you should to read to make sure it’s right for your circumstances. But if it is, it could really turbo-charge your savings.


Buying with a small deposit

And if you’re concerned that these first time buyer fees will eat too big a hole into your deposit don’t worry – there are schemes available to help you purchase a home with a small deposit. These include:

  • Help to Buy Equity Loan scheme: When you buy through the Help to Buy Equity Loan scheme the Government will lend you up to 20% of the property’s value – or up to 40% if the property is in London. This is called the equity loan. You’ll need to put down at least 5% as a deposit. And you’ll take out a mortgage for the remaining amount. Regional price caps apply on the value of property you can purchase through the Help to Buy Equity Loan scheme, up to a maximum of £600,000 in London.* (This information applies to England only. Click here for more information)
  • Shared Ownership: With shared ownership, you buy a share of a property, between 10%-75%, and pay rent on the remaining share.
  • Deposit Unlock: With this new scheme, which has been devised between the housebuilding industry and lenders, you can purchase a new build home worth up to £750,000 from participating home builders with just a 5% deposit.


So if you’re a first time buyer our team of expert mortgage advisers are here to answer all your questions about first time buyer mortgages and help you find the right mortgage for you too. Call us today on 01793 611400 or click here to arrange a call-back.

Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.

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