We aim to provide all our applicants with as much information as possible so that you can decide whether buying a home with us will be a suitable option for yourself and your family. The information which we have provided below is based on typical examples and is for illustration purposes only. If you are considering purchasing a home through us we would strongly recommend that you undertake your own research so that you can find a solicitor and mortgage lender that best meets your needs.
As a buyer, you will be liable to meet certain purchasing costs. To meet these costs all applicants are required to have a minimum of £2,000 savings available. You will not be able to put these costs on to your credit card, or take out a personal loan to cover the costs. We will however, accept a signed letter from a family member that states they will be gifting you a sum of money to cover purchasing costs.
Costs may vary according to the type of property you purchase, i.e whether it is a brand new or second hand home, as well as the area the property is located in and the price which you pay for it. Costs also vary between solicitors and mortgage lenders.
Legal Fees and Deposits:
You will need a solicitor to represent you when buying a home and preferably one that specialises in the house buying and selling process which is known as conveyancing. A solicitor will protect your interests and check important details such as:
- Whether the seller has the right to sell the home which you wish to buy
- Whether there are any outstanding debts on the home
Here is a guide to the approximate costs that a solicitor may charge (excluding VAT):
|Description of Work||Cost £
|Solicitors Fee: this is for the basic legal work that they will do on your and your mortgage lenders behalf
|Land Registry Fee: this registers you as the owner of the home at the Land Registry as well as any mortgages or loans (known as Charges) that you have taken out in order to buy it
|Environmental Search Fee: this shows any planning applications made on the property you are buying and also any planned developments that may affect your home
|Dispersements: your solicitor will charge for any administrative work that they undertake on your or your mortgage lenders behalf. This includes bankruptcy searches or telegraphic transfer fees
|Stamp Duty Land Tax: If you purchase a property for more than £125,000 you will need to pay 1% of the full purchase price (i.e 100%). If you pay less than £125,000 you don't need to pay and Stamp Duty Land Tax. If you buy a property in an area designated by the Government as ‘disadvantaged' you won't need to pay Stamp Duty Land Tax if the purchase price is £150,000 or less. You should check with your solicitor at the outset as to if you are liable to pay Stamp Duty Land Tax.
||1% of purchase price if paying above £125,000 unless you purchase in an area classified as ‘disadvantaged' by the Government
|Deposit for Exchange of Contracts: When you are buying a home on the open market the vendor may request you pay an exchange deposit. This is held as security in case you do not complete the transaction. If you do not have access to a deposit you should tell your solicitor at the outset who may be able to negotiate on your behalf.
||Up to 5% of the purchase price
|Reserve Deposit (New Build): If you purchase a brand new property the house builder would normally expect you to pay a deposit in order to reserve the home. This is sometimes known as an ‘early bird' deposit and in most instances it is non refundable. If you are buying a Hafod property we will charge you a non refundable reservation fee of £200
You not usually need to pay all the solicitors costs up front. In most instances you would pay approximately £150 initially and then the balance when you exchange contracts or on completion. To avoid any unexpected costs it is important that you get a quote from your solicitor before you instruct them to start work on your behalf.
Mortgage and Survey Costs
A mortgage may be the biggest financial commitment you will make in your lifetime and therefore we recommend you shop around thoroughly before making a decision. As a general rule, you will need to meet the following initial mortgage costs:
|Description of Work||Cost £
|Mortgage Arrangement Fee: Most mortgage lenders charge an administration fee. This fee will usually vary according to which type of mortgage you choose. You should only have to pay 1 fee - if you are using an Independent Financial Advisor they should not charge you a separate fee as they are paid by the mortgage lender with whom you place your mortgage with.
||Currently in excess of £500
|Valuation & Survey Fee: No matter which type of property you buy your mortgage lender will require you to have a valuation survey carried out so that they can be sure the property is suitable for them to lend upon.||Valuation only £250 (approx)
Homebuyers Report & Valuation £450 (approx)
|Deposit: Some mortgage lenders may require you to pay a deposit, or alternatively you may wish to pay a deposit yourself in order to secure a more competitive mortgage deal. This will vary greatly from lender to lender and your mortgage advisor will be able to guide you on what deposit may be needed for each type of product.
||If required usually 5% of the total mortgage amount needed