Your first home - What will it cost?

Deposit

As suggested above, the expectation is that you will have 5% of the purchase price available as a deposit. That's £10,000 for a property with a purchase price / value of £200,000 Your deposit is payable when your solicitor exchanges contracts. The larger your deposit, the less risk there is to the lender. Some lenders offer more attractive interest rates to borrowers who are willing to pay larger deposits.

Solicitor Fees

A solicitor or licensed conveyancer performs a vital role in the purchase process. Friends and family may recommend several to you. He will invoice you for his professional services, disbursements and VAT. It is likely that your solicitor will request a small amount of money up front to obtain various searches. The total cost will depend on the purchase price of the property. Expect to pay in the region of £700 for a property with a purchase price of £150,000

Stamp duty Land Tax

You pay Stamp Duty Land Tax on property. If the property purchase price is £125,000 or less, you will not pay Stamp Duty Land Tax. If it's more than £125,000, you will pay between one and four per cent of the whole purchase price, on a sliding scale:

Residential property - purchase price	Rate of Stamp Duty Land Tax
up to £125,000	0%
£125,001 - £250,000	1%
£250,001 - £500,000	3%
£500,001 or more	4%

If you're buying a property in an area designated by the government as 'disadvantaged', you will not pay any Stamp Duty Land Tax if the purchase price is £150,000 or less. Your solicitor will usually allow for the figure in his quotation and will arrange to pay it on your behalf on legal completion.

Property surveys

The lender will normally insist that the property is inspected by a RICS (Royal Institute of Chartered Surveyors) qualified valuer to determine whether it is suitable security for the loan. The cost to undertake the mortgage valuation is usually paid for by the borrower. However, the mortgage valuation is not a comprehensive report and you are advised to obtain a more detailed report for your own benefit. Expect to pay about £250 for a basic mortgage valuation on a property with a purchase price of £150,000 Our consultants will talk to you about the costs associated with the more detailed Homebuyers Report and Full Buildings Surveys.

Product Arrangement / Booking fee

Some products, particularly fixed rates, attract fees that are payable 'upfront' to secure the rate for a period of time. Although the fee might be calculated as a percentage of the mortgage advance, it is usually a fixed sum regardless of the size of the loan. The fee varies from lender to lender and product to product. If you are looking for the best interest rate be prepared to pay a fee that may cost you several hundreds of pounds. If the loan size you are seeking is smaller than the average, it may work out more cost effective to arrange a mortgage with a slightly higher rate of interest that doesn't incur a fee.

Removals

If you have already acquired items of furniture you may consider obtaining quotes from a couple of removal companies. The cost will be determined by a number of factors including the distance to be travelled. Alternatively, if you haven't much to move, you may prefer to hire a van and move yourself. If you transport the items yourself, make sure that the items are adequately insured against loss or damage.

Higher Lending Charge

This is a premium charged by Lenders in order to indemnify themselves (not the borrower) against any financial shortfall they may incur in the event of repossessing a property which must then be sold at a loss. It usually applies if the loan amount required is greater than 75% of the purchase price or property value (whichever is the lower). Often the Lender will pay the cost of this insurance themselves if the loan requested is between 75% and 90% Loan To Value.

Home insurance

Owning your own home is a big commitment and it's sensible to take precautions in case things go wrong. Make it a priority to arrange suitable insurance cover at the same time you apply for your mortgage finance.

The main types of insurance you should consider when buying a property are:

• Contents (removable items)
• Buildings (including fixtures)
• Mortgage payment protection (protection against accident, sickness and/or redundancy)
• Life cover and Critical Illness cover.

In the majority of cases, your mortgage provider will make it a condition of your mortgage Offer of advance that you arrange buildings insurance to protect their interest as well as your own.
Remember that cheaper is not always better - make sure the cover is sufficient for what you need.