Moving house will be expensive, but you should be able to keep the stress
levels down if you know beforehand what you are letting yourself in for and
what sort of pitfalls the unwary homebuyer can fall into
Set out below are the sort of things you should consider when you first start
to think about moving house
Find the Right Money
Mortgages
Mortgages are important. "£70,000 over 25 years" sounds cool if you say it
quickly and in a bit of a deep voice - but it's a lot of money and a long time. It
really pays to get it right. We'll be the first to admit that we don't know everything
that you need to know about mortgages - so we've got some help. John Charcol has grown
to be the largest mortgage broker in the UK - and they've done this by providing a top
quality service. They have access to many deals that simply are not available to you
or I if we approached lenders directly. They can give the following assurances:
- They will not take an arrangement fee. If you arrange your mortgage on-line,
you will not pay any arrangement fee to the broker.
- They are independent. They offer mortgages from all the leading mortgage providers.
Not just one or even six but all the leading providers.
Typically the amount you can borrow is dependant on your income(s) and
a good rule of thumb is that you can borrow up to three times your salary (although you can
also get two and a half times your combined salaries or three times the higher salary plus
one times the lower one). Add to this
any spare cash you have saved as a deposit and the proceeds of a previous property (if
there was any) and take off the costs of moving (typically around 5%) to work out
your homebuying budget. Use this handy calculator to work out what price range you can
afford :
These break down into the five main areas set out below, plus a handful of smaller
costs that are easy to overlook
Estate Agents
A typical estate agent will charge anywhere between one and two-and-a-half
percent (1% - 2½%) of the value of your current home to sell it for you.
All in all, this may be the largest cost of moving house. However, despite their
reputation for making a killing, most estate agents only make a small profit from
your instruction fee, after the costs of having someone show all those myriad of
prospective purchasers around your home and the advertising of your property that
they do. You can sell your house yourself to save on this cost. You could sell it
for as little as the £50 cost of a classified advert in your local paper, or you
could find an agent who will do just part of the service (eg newspaper advertising
but not showing people around or negotiating on your behalf) for a fixed fee
Surveyors
There are two main types of survey - the lender's and the homebuyer's survey.
- The simpler lender's survey checks to see whether the house or flat is
structurally sound; basically whether it will still be around in a few years time
if the lender should need to repossess the property. They typically cost around £200,
but may be more for more substantial properties
- The more detailed homebuyer's survey does everything that is needed for the lender
and then typically goes into the sort of things that may need attention, but that
aren't serious enough to worry a lender, such as whether the loft is lagged to the
latest standards. This can cost anywhere between £400 and £800 depending on how
detailed a report you want from your surveyor, although their standard homebuyer's
report will typically be around £500.
Solicitors
A solicitor's fee may or may not be dependant on the value of your home. A typical
fee may be somewheer between £500 and £800, but this can skyrocket if complications
set in, such as discovering that someone else lays claim to part of the property
that you are intending to buy (or worse, sell). It is best to arrange a fixed fee
before you start, if possible
Mortgage
It is becoming more common for mortgage companies to charge a setup fee of a
few hundred pounds. And don't forget that the main reason most people have a survey
is to satisfy their mortgage lender; another couple of hundred pounds. You will
also need to add in any negative equity that is tied up in your current property
if you are one of the unlucky handful left in this situation
Moving in
The amount that physically moving all of your worldly goods from your old
place to the new one will vary a lot depending on how far you move and whether
you need your stuff stored, but the size of your house (and therefore its cost)
should give you a rough idea. Budget for around half a percent (½%)
All the rest
There are lots of little costs when you move house, ranging from post and telephone
forwarding charges through travelling and childcare whilst you hunt for that elusive
ideal home to those cards to tell everyone your new address. You should put aside at
least a further £500 for this; more if you are moving some distance.
This all gives a total cost of around 5% of the value of your new home. That's a
whopping £4,200 for the average house sale in 1998 (£84,000)
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