The Hidden Costs of Homebuying: What You Need to Know

As a homeowner, I’ve learned the hard way that buying a house is about more than just saving for a deposit. When I first started looking for my dream home, I was shocked by the number of additional fees and charges that I wasn’t aware of. From stamp duty to mortgage account fees, it seemed like every step of the way, there was another cost lurking around the corner.

But I’m not alone. A recent study by David Wilson Homes found that over half of Britons are unfamiliar with the stamp duty fee, and many more know little or nothing about mortgages. In fact, the study revealed that a staggering 91% of respondents were unfamiliar with higher lending charges, making it the least recognised mortgage fee among homeowners.

Understanding the hidden costs of homebuying

So, what are these hidden costs, and how can you avoid them? Let’s start with the basics. A mortgage provider may charge a mortgage account fee, typically between £100 and £300, to set up, maintain and close your mortgage account. This can be added to your mortgage on completion, or you can pay it upfront. But a whopping 85% of survey respondents were unaware of this fee.

Another cost to watch out for is the early repayment charge. If you decide to come out of a fixed, discounted, or tracker deal early, you may have to pay an early repayment charge added to the redemption figure provided by your existing mortgage provider. Again, 85% of survey respondents reported being unfamiliar with the costs of these fees.

Navigating the homebuying process

But it’s not just mortgage fees that you need to worry about. The study also found that almost 80% of people were unfamiliar with the costs of own building insurance, while 78% were unfamiliar with the costs of conveyancing fees, typically around £800 to £1,500.

So, what can you do to avoid these hidden costs? The first step is to do your research. Understand what fees are involved in the homebuying process, and factor them into your budget. You should also shop around for mortgage deals, and consider working with a mortgage broker who can help you navigate the process.

Working with a mortgage broker

Finally, don’t be afraid to ask questions. If you’re unsure about a particular fee or charge, ask your mortgage provider or broker to explain it to you. Remember, buying a home is a big investment, and it’s worth taking the time to understand the costs involved.

By being aware of the hidden costs of homebuying, you can avoid unexpected surprises and make the process less stressful. So, do your research, shop around, and don’t be afraid to ask questions. Your wallet – and your sanity – will thank you.