Hidden costs of buying
If you thought that all you needed was a mortgage, think again.
Mortgage downpayment
You need cash upfront to qualify for most mortgages. Generally, the more you can put down, the better your choice of lending rate.
MIG
If you don't have much money for your mortgage downpayment, you may still get a mortgage. The lender considers you more of a financial risk, so you'll have to pay a mortgage indemnity guarantee (MIG) on top of the rest of the mortgage. This can often be avoided if you have 10% or 15% of the house purchase price saved up.
Solicitor's fees
This is for conveyancing: checking title deeds, notifying Land Registry, doing a local search to find out more about the property, and drawing up contracts.
Surveys
A chartered surveyor will charge you to report on the condition of the property. Sometimes your mortgage lender will pay for this, but not always.
Stamp duty
This is a government tax on the purchase price of the building. Until September 2009, stamp duty is suspended on properties costing less than £175,000. This is a temporary suspension, up from the previous threshold of £125,000, and has been welcomed by many as it will save eligible homebuyers up to £1,750. Homes costing from £175,001 to £250,000 have 1% of their value payable. If you're going for something that's worth £250,001 to £500,000 (we wish) you'll get stung for 3%, and anything over this is charged at 4%.
Land registry fee
Payable every time you complete a home purchase, or change your mortgage lender.
Buildings insurance
Needed to protect the structure of your home (not your personal possessions), and must be in place by the time you exchange contracts.
Contents insurance
Cover for your personal possessions, carpets, curtains, and so on.
MPPI
This is mortgage payment protection insurance, also called payment protection insurance. Covers mortgage repayments should you fall ill or lose your job.
And the rest:
Renovations, repairs, decorating, furniture, carpets, curtains, appliances and more.
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