How much to allow for fees when buying?

Jon211

I'm a First Time Buyer looking to get onto the ladder earlyish next year.

My budget is set to a maximum of £235K.
If I assume I buy something for this maximum figure how much should I be allowing for all the fees.

Stamp Duty will be 1%, so £2,350.
Mortgage arrangement fees seem to be around the £500 mark.
Then I have my solicitor's and survey fees - thinking of about £1,000 for these?

I currently have budgeted £10K for the fees and then buying things like bed/other furniture etc. when I move in (currently renting a room in furnished accommodation)

Also, my deposit should be ~£55K when I want to buy, which comes to around 23-24% of the £235K figure.
Do you think it would be worth either lowering my budget by a few thousand or waiting a little longer to make sure I have the magic 25% deposit?
I'm currently saving around £1K per month so it shouldn't be too much longer if I choose to save a bit more.

lynzpower

I think you are in an excellent position, having such a significant deposit- plenty dont.

In any case while you are looking ( most purchases take approx 3 months) youll have another 3k saved

Im not sure really whether 25% deposit is that "magic". In fact 5% seems adequate to get the cheaper deals in any case. In saying that of course its moneysaving to have as big a deposit as poss, on the smallest mortgage as poss, as clearly interest on the mortgage is THE biggest expense in buying your own home.

Have you seen a whole of market broker? They should be able to tell you what deals are around for someone in your position

Jon211

Yeah, I know I'm fortunate to have the deposit I do, luckily my grandparents invested some money for me when I was a child and it's done quite well.
I've been saving hard for 4 years as well myself though to get me into this position.
Unfortunately I'll still probably only be able to afford a 1 bedroom or small 2 bedroom flat where I am looking though

To be honest I thought the best deals on mortgages were reserved for those with 25% deposit. I do plan on seeing a mortgage broker in the new year so hopefully I'll have a better idea of things then.

I actually work for a bank too, but at the minute they don't offer mortgage deals for employees (not in Europe anyway!)

lynzpower

are you looking to buy in Twickenham?

Also to say, Home information packs are coming in in ?june? july?

If you wait till then the vendor has to pay for all the searches- not the buyers - so theres moneysaving there to if you can wait that long

Jon211

I'm thinking of buying around Clapham/Balham area (work in Canary Wharf so want to be a bit nearer work but also want to stay around the west side of London) Still not the cheapest of areas!

Thanks for the info on Home Information Packs, I didn't know about them. Seems like a good idea.

lynzpower

And not the most convenient either! Balham to the wharf :eek: youd never catch me doing that journey!

Id sooner choose greenwich- but thats just me!

All the best with it

Jon211

Northern line to London Bridge, then Jubilee - easy!
It sure beats my current journey to Waterloo. South West trains have to be the worst train company in existence

I probably would move to somewhere like Greenwich if the only aim was to be close to work, but most of my friends live around West London so want to stay this side.

Baby_A

Jon211 wrote:

I'm thinking of buying around Clapham/Balham area (work in Canary Wharf so want to be a bit nearer work but also want to stay around the west side of London) Still not the cheapest of areas!

Thanks for the info on Home Information Packs, I didn't know about them. Seems like a good idea.

Hey John, We are in the process of buying, next step is exchanging contracts. We have family in Balham and Clapham so had decided to stay around this area. We are buying in Mitcham which just a bit ahead of Tooting, get alot more better value for money there, than Clapham or Balham. Thornoton Heath was even more cheaper than Mitcham, but I prefered the area in Mitcham.

Maybe keep your options open, we are buying a 3 bed semi in Mitcham for 240k......

Baby_A

Fees I know I have to pay or have already paid:

£695 for Valuation and Homebuyer survey
£699 for Mortgage arrangement which is combined into our mortgage
£600 solicitor
£2,400 Stamp Duty
£xx not sure how much searches will be