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How much does it really cost to buy your first home?

Buying a home is one of the biggest financial commitments you will ever make, so it is vital to make absolutely sure you can afford it. In addition to the mortgage itself, there are other costs associated with buying a property that you will need to be able to afford.

Your deposit is the first big expenditure, which is usually around 10% of the cost of the home. The larger the deposit, the less you will have to borrow, giving you access to preferable interest rates.

You will often be asked to pay a mortgage arrangement fee, which may be around £1,000 but can vary. You will also have to pay for a survey, transfer fee, valuation fee, solicitors’ fees and maybe stamp duty, depending on the value of the home.

Once you have accounted for all these extra costs, which may total around £5,000, there will also be the cost of moving into your home and any decoration and furnishings.

Finding a mortgage with a low interest rate will help to keep the cost of your mortgage low, although you will have to calculate the overall cost of the product as fees for a low rate mortgage may increase the total cost. Mortgage advisors spend time on a CeMAP training course, so that they can easily calculate the overall cost of a product for you.

If you want to pay the minimal amount for your home, try to make regular overpayments on your mortgage, so that you reduce the overall amount which is due, and therefore the interest payable.

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