Here's How To Plan For The Hidden Costs Of Buying A Home

While becoming a homeowner is ultimately a joyful and fulfilling experience, the property purchase process can be layered with hidden costs and outlays. Searches, surveys and stamp duty are just a few ways that unexpected bills can add up, leaving you scratching your head as to where all your hard-saved cash has ended up.

While these unforeseen money obstacles can seem daunting when you enter the home buying game, there are simple and easy ways to plan for the unexpected – and even to avoid some costs altogether. Here are just a few of the ways to prepare for the hidden costs of buying a home…

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Get yourself into shape

Having a healthy credit score will not only make you feel all warm and fuzzy inside, it’ll grant you access to the best rates and introductory offers on mortgages, which could save you thousands in the long run. Ensuring you’re on the electoral roll, having all your accounts correctly registered and making sure you're up to date with all credit payments will ensure you’re in great financial shape. Some mortgage products even offer a cash lump sum on completion, which could cover some unexpected costs that you’ve accrued along the way.

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Try to get a clear a picture as possible

This should begin with the very first viewing of the property. Ask the estate agent for as much information as possible to build up a clear picture of why the property is for sale, and anything you should expect that may hold the process up. If the property is a leasehold, ask them how long is left on the lease (it can cost around 20k to extend), and if the freeholder has any plans for major construction on the building within the next five years. Any estate agent worth their salt should have this information to hand, and any hidden costs that are uncovered at this stage can be used to negotiate on the sale price. Any savings made can be added to the pot to cover other unexpected costs, and any projected costs for major repairs can start to be saved for.

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Ask your solicitor to project their fees

As soon as you begin the conveyancing process, ask your solicitor to provide a rough projected cost for their services, and also to outline any potential issues with the purchase. For example, if the property is in a Chancel liable area, you may have to take out chancel liability insurance. This is a relatively small cost against what could be a huge outlay in the future, so it’s well worth investing in.

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Work out cash vs credit

When it comes to home buying expenses, some of the bills you incur can be put on credit card rather than pay in cash. While avoiding getting into debt is always the best way forward, having a credit card as back up is well worth looking into if your budget is tight and you haven’t planned a cash buffer. Prepare yourself with a credit card that has an interest free introductory offer, however ensure that when you apply there is no danger you’ll be rejected – unsuccessful credit applications can have a huge impact your credit score, placing your mortgage application in jeopardy. Surveys and solicitors fees can be paid with a credit card, meaning you can clear your debts interest free once the home buying process is complete.

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Save on surveys

Paying to have your potential property surveyed can be a costly – yet essential – process. Your mortgage lender will require a basic survey to lend against your home, and if you’re purchasing an older property, a buildings survey is also highly recommended. Some lenders include survey cost cash back offers for first time buyers, so ask around and ensure your mortgage advisor takes full advantage of any offers on the table.