Moving to a new home can be a stressful experience, and the best way to ensure a smooth transition is to be organised. Creating a budget before your move means you won’t face any unexpected costs in the middle of the process. There are several costs you might not be aware of when buying a new home, but budgeting for them will make the moving process significantly easier.
Legal fees
Working with a solicitor is an upfront cost that can save time and money further along in the moving process. A solicitor will manage all the legal requirements of purchasing your new home, as well as any paperwork related to your new home ownership.
Stamp duty
Stamp duty is a tax on properties worth £125,000 or more. Stamp duty is calculated based on the property value, and the rates are as follows:
- Up to £125,000 – No charge
- £125,001 to £250,000 – 2%
- £251,000 to £925,000 – 5%
- £925,001 to £1.5 million – 10%
- Over £1.5 million – 12%
You can use the Money Advice Service’s stamp duty calculator to see how much stamp duty you will need to pay on your new home.
Moving costs
Some people prefer to hire a professional removal company when moving, while others prefer to hire a van and do it themselves. A removal company will be more expensive than the DIY option, but it will also make the moving process faster and less stressful. Whatever you decide to do, moving insurance (also known as transit insurance) is an important investment that protects against, theft, breakage, and other accidents.
Mortgage fees
Mortgage lenders charge a mortgage fee for setting up the mortgage. This includes a booking fee, an arrangement fee, and a mortgage valuation fee. Some lenders allow you to add your mortgage fee to your monthly mortgage repayment, but paying the fee upfront means no additional interest on your mortgage.
Insurance
Many mortgage lenders will require you to have buildings insurance in order to qualify for a mortgage. Buildings insurance covers the structure of your property, while content insurance covers the belongings in your home. Home insurance is often a combination of these services, but make sure to check what your plan covers before signing up.
Mail redirection
You should change your address on as many accounts as possible to avoid post being sent to your old address after your move. However, even if you’re diligent, there’s a chance some items will be sent to your old address by mistake. Royal Mail offer a mail redirection service to ensure you don’t miss any post. This service can be purchased for a one, three, six, or twelve-month period.
Buying a new home is a hectic process, and it’s important to plan ahead for any bumps in the road you may encounter. Putting together a budget will save you time, money, and stress, so make sure you’re financially prepared. Once you get to your new home, you’ll be able to relax knowing everything has been accounted for.