Buying your first home is an exciting milestone, but it's essential to be well-prepared for the financial aspects of homeownership. Recent research suggests that many first-time buyers are unaware of the additional costs involved in purchasing a property.
In this article, we will shed light on these costs to ensure you're fully informed and ready to take the leap onto the property ladder.
Legal Fees – The Obvious Expense
Legal fees are something most first-time buyers are aware of. These are the costs associated with the legal work required for property purchase, including conveyancing and land registry fees. It's crucial to budget for these expenses, which can vary depending on the complexity of the transaction.
Stamp Duty: A Cost You Might Not Expect
Surprisingly, only 53% of first-time buyers were aware of stamp duty costs before applying for a mortgage. Stamp duty is a tax imposed by the government when purchasing a property, and the amount you pay depends on the property's price. Make sure to factor this into your budget, as it can be a substantial expense.
Mortgage Product Fees: Often Overlooked
Mortgage product fees are another cost that many first-time buyers overlook. These fees are associated with the specific mortgage product you choose and can include arrangement fees, valuation fees, and booking fees. The research found that only 47% of first-time buyers were aware of these costs. Remember, these fees can significantly impact the overall cost of your mortgage.
The Hidden Costs Add Up
On average, first-time buyers spend around £3,400 on upfront costs like legal and valuation fees. But that's not all – they typically allocate an additional £4,900 for renovations and redecorating. When you add these costs together, it amounts to £8,300 in extra expenses related to buying a house.
These hidden costs are not insignificant, and it's important to budget for them to avoid financial surprises. As you plan your first home purchase, consider these additional expenses to ensure a smooth and stress-free homebuying journey.
The Future of First-Time Buyers
Looking ahead, it's predicted that Gibraltarian first-time buyers collectively will spend a total of £1.2 million on extra costs related to home purchases by 2025. This means they will contribute a significant £36.5 million to the Gibraltar housing market in the next two years. As first-time buyers, your contributions play a vital role in the property market, and being informed about the costs is essential to make sound financial decisions.
The Role of Surveyors
Building Surveyors play an essential role in providing information about the costs associated with buying a home. Their experience and expertise can help ensure that first-time buyers are fully prepared for this significant financial and personal milestone.
In conclusion, buying your first home is a momentous occasion, but it comes with various hidden costs that you should be aware of. Understanding legal fees, stamp duty, and mortgage product fees is crucial for a smooth and successful homebuying experience. Additionally, don't forget to budget for renovations and redecorating. With the right knowledge and guidance, you can embark on your homeownership journey fully prepared for these financial responsibilities.
To see how we can help you as a first time buyer, call our team today.
(00350) 200 79210 or email paul@richardsons.gi
