How Much Money Do I Need As A First-Time Buyer?

Andrew Lee Property Lawyers

Feb 182 min read

Buying your first home is an exciting milestone, but understanding the financial commitment involved is crucial. From deposits and mortgage fees to legal and moving costs, first-time buyers need to be prepared for more than just the property’s price.

If you’re looking to buy a home in Maidstone or the surrounding areas, working with experienced conveyancing lawyers like the team here at Andrew Lee Property Lawyers ensures you understand all costs upfront, helping you budget effectively and avoid unexpected expenses.

Here is a rough guide on how much money you might need as a first-time buyer.

The Deposit – Your Biggest Expense

The largest cost for most first-time buyers is the deposit. Typically, lenders require a minimum deposit of 5% to 10% of the property price, though a larger deposit can secure better mortgage rates.

For example, if you’re buying a £250,000 property:

● A 5% deposit would be £12,500.

● A 10% deposit would be £25,000.

A higher deposit can make mortgage repayments more affordable and increase your chances of getting approved by lenders.

Mortgage Fees and Additional Costs

When applying for a mortgage, you may encounter additional fees, including:

● Mortgage Arrangement Fee: Charged by lenders for setting up the loan, typically between £500 and £2,000.

● Valuation Fee: Covers the lender’s assessment of the property’s value, costing anywhere from £150 to £1,500.

● Mortgage Broker Fees: If using a broker, expect to pay around £300-£500 for their services.

● Property Conveyancing and Legal Fees

First-time buyers must also budget for property conveyancing – the legal process of transferring homeownership. At Andrew Lee Property Lawyers, we offer expert conveyancing services to ensure a smooth transaction.

Conveyancing costs typically range between £850 and £1,500, depending on the property’s value and complexity. This includes legal searches, contracts, and registering the property with HM Land Registry.

Stamp Duty: Do First-Time Buyers Pay It?

Good news for first-time buyers in England! If your property costs £425,000 or less, you won’t pay Stamp Duty. If the property is priced between £425,001 and £625,000, you’ll only pay Stamp Duty on the amount above £425,000.

For homes over £625,000, standard Stamp Duty rates apply. Your conveyancing lawyer will help you calculate the exact cost.

Survey and Moving Costs

Other costs to budget for include:

● Property Survey: £400-£1,500 depending on the type of survey.

● Removal Costs: £300-£1,500 depending on distance and services needed.

These additional expenses can add up, so it’s important to plan ahead.

Get Expert Legal Guidance Today

Buying your first home is a big financial commitment, but with the right preparation, you can navigate the process with confidence. Andrew Lee Property Lawyers in Maidstone offer expert conveyancing services to help first-time buyers through every step.