It is important to consider the costs and responsibilities of buying your own home before making a decision to go ahead.  You should take your own independent financial advice before making any commitment.  Here is a list of some of the costs you will have to pay.

Survey and legal costs

You will be responsible for your own solicitor’s costs, survey costs and costs associated with obtaining a mortgage.  Lenders normally charge for a property valuation and an arrangement fee.   

The housing association will not require you to get a full structural survey.

Land Registry

When you buy a home, your solicitor has to arrange for its details to be registered at a government office, the Land Registry.  You will need to pay a fee for the registration and your solicitor will tell you how much this will cost.

Stamp duty

Stamp duty is a tax you may have to pay if the home you buy is above a certain price.  Your solicitor will inform you if any stamp duty is due.

Deposits

Mortgage lenders may require a deposit for the mortgage and this may vary from lender to lender.  An independent financial advisor will be able to confirm if this is required and at what percentage of the borrowing.   

You will be required to pay the housing association a £250 deposit in order to reserve a selected plot.  This will be deducted from the purchase price upon completion.  It is non refundable if a successful completion is not achieved.

Mortgage repayments

Most mortgages require you to pay the loan by monthly repayments, which may increase or decrease if interest rates change.  The amount you can afford to borrow will depend on your income, outgoings and savings.  An independent financial advisor will be able to explain the costs of different types of mortgages available.

Mortgage payment protection insurance

When you arrange your mortgage you should consider whether you would benefit from the security provided by Mortgage Payment Protection Insurance (MPPI).  There are many such policies available and their terms and conditions vary considerable.  You should seek advice from your lender and/or an independent financial adviser to find out whether MPPI will be of benefit to you and to decide on a policy that will suit your needs and give you the cover you require.            

If at any time you become unable to meet your mortgage repayments because you lose your income through, for example, unemployment or ill health, your home may be repossessed by the mortgage lender.

Help with mortgage repayments is available through the State benefits system but this assistance is limited and you are unlikely to receive any help with your repayments for the first nine months of your claim.  Depending on the size of your mortgage any benefit paid will help with your mortgage interest but not with other expenses on your mortgage or insurance.

Insurance

You will have to insure your home in case your property is damaged or destroyed by fire or similar disaster.  This is called Buildings Insurance.  As well as insuring the building, we also feel it is important to insure your belongings and furniture.  You should take your own independent financial advice before making any commitment.

Service Charges

If you buy a leasehold property, normally an apartment, you will have to pay a monthly service charge.  This contributes towards the upkeep and maintenance costs for the building and communal areas, the responsibility of which lies with the Housing Association (also the Freeholder or Landlord). This also includes the buildings insurance.  

Costs will be listed in the service charge and service charges vary from scheme to scheme. 

Repairs

When you buy a ‘leasehold’ property you are responsible for all repairs within your own home and not the fabric of the building or common parts.  When you buy a ‘freehold’ property, normally a house, you are responsible for all repairs and maintenance to your property. 

Services

Other costs you need to pay are utility bills - gas, electricity and water, Council tax, buildings insurance (freeholders only) and contents insurance.      

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