So you’ve decided to buy a property. Very good! But have you ever thought how much can you afford to pay? Interestingly, on top of the cost of the house itself, there are many other, one-off expenses involved in buying a home and moving which can make you poorer by £2,000 to £5,000. So when buying a house, you also need to take these extra costs into account in order to get a good idea of what sort of homes you can realistically hope to buy.

Say for instance: if the price of the property you plan to buy is more than £60,000, then you’ve to pay a government tax called Stamp Duty. The lender will need to carry out a valuation of your prospective home to check it is worth the money it is lending you. This will cost you from around £150. Lenders may also charge an arrangement or completion fee. Your solicitor will charge a fee for its services, starting at £400. The land registry costs, a local search (usually between £80 and £150) and other disbursements are also on the solicitor’s bill on which you’ve to pay VAT (value added tax). In fact, legal expenses are one of the major costs attached to property - both during buying and selling. Apart from this, you’ll also need to set aside money for insurance, moving costs and furnishing costs.

If these expenses make your head turn, and say you plan to buy an older house then make sure you’ve looked into what this can entail. It can look lovely but cost a lot to keep up in terms of maintenance and heating bills. But before buying an old house check what fixtures and fittings will be left by the previous owner; consider the layout of the house; are there enough power points; whether insulation, central heating, and plumbing work is in order.

Whatever the case, it is important to research things like a particular area before viewing lots of homes there, or making an offer on a house there as this will save you a lot of time and effort by doing so early on in the process. If you decide it is not the kind of neighbourhood you would enjoy living in, even if you can get a bigger home for your money, make sure you really are doing the right thing. Remember that you can always make changes to a house but not to the neighbourhood. Simply touring the area can give you a good idea of what it is like.

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FAQs for home buyers :
In a new build property, who pays for the extras?
It is the co-ownership purchaser who pays for the extras.

For co-ownership, what source of income is considered?
• Income from permanent employment (full-time or part-time).
• Income from some contract employment, depending on individual circumstances
• Some state benefits (disability living allowance if awarded for life, working tax credit, child tax credit and disabled families tax credit)
• Private pensions
• Income if you’re self-employed based on your last three sets of accounts and one year projections.

There are two payments every month - mortgage and rent in a co-ownership. How then making a single monthly mortgage payment is cheaper?
With co-ownership the mortgage payment is much less and the rent is affordable. So when the 2 amounts are combined, the total is less than a single large mortgage payment.

My property valuation report has raised some queries or recommended further investigations. What should I do?
If this happens make sure you get each queried item checked out to your satisfaction by an appropriate professional before you go any further. For instance, if the report recommends a specialist report on the central heating boiler, then get the boiler inspected by a qualified heating engineer.

What are the fees that accompany the application form?
There are three parts to the fees sent in with your application. There is a holding fee of £100, a legal package fee of £210.33 and a valuation fee of either £35 (for a new build property) or £90 (for an existing property). This makes a total payable of £345.33 if the property you’re applying for is new or £400.33 if the property is an existing one.

How soon should I hear from co-ownership after I have applied to purchase a property?
The most important thing if you want a quick decision is to make sure that your application form is fully completed and that you send in all the back-up information needed i.e., pay slips, landlord and employer's forms, etc. Once all the documents are in place, you can be called for an interview inside 10 days.

Are there many lenders offering mortgages to co-ownership purchasers?
Many do, and some offer special package deals from time to time. When you’re ready to apply, you may wish to check out the current mortgage packages directly with several lenders to find one that suits you. You can get free, no obligation quotations from lenders on request.

Can my parents be guarantors and pay for the property?
Since you’re purchasing the property in your own name and signing legal documents in the same way, a guarantor in this situation is not accepted. However, if your parents can make you a cash gift you could then use the money as a deposit on the property.

I sold my earlier property and now I’m renting. Can I purchase through co-ownership?
You’re eligible to purchase a property through co-ownership, depending on why your previous home was sold and what your financial situation is now.

Can I buy the house even though I have split up with my partner with whom I had planned to purchase through co-ownership?
Hopefully you can, but it all depends on whether you can still afford it. If not, you may have the option of finding a less expensive property instead.

Sometimes people ask if they can send in an application, giving property details inside the value limit and then pay a 'top up' amount direct to the seller. Try not doing this, because it works against you later when you come to buy a bigger share or sell your property.

Buying property abroad :
While deciding to buy a property aboard, make sure you enquire about few things like the state of the house in winter. Also check out what the local area is like during the off-season and whether you would like to visit the place every year.

If you’ve made up your mind to buy a property abroad, you can pay the amount by cash or either extend your existing mortgage or prefer a new mortgage for the property. However, extending mortgages is the cheapest way of raising cash though you may not be getting a remortgage for more than 75 per cent of the property’s price.

Avoid the risk of taking out a foreign currency mortgage as the currency fluctuation may increase your payments. Emphasise on quick property transaction as longer the time taken for transaction the more is the risk of rate fluctuation. As property transaction in France takes about 20 weeks whereas in Spain, Italy, Greece and Portugal it takes around 12 to 18 weeks. So it depends from country to country. To avoid forgery or other problems, consult a British lawyer before you sign the deal.

For renting property aboard you need to confirm with the tax laws of the country concerned. Some countries have reciprocal tax agreements with the UK. This system ensures that you don’t end up paying tax twice.

At a glance, a property deal aboard may sound cheaper, but it may have hidden cost like legal fees, regional taxes, occupancy tax can raise your expenses. Legal fees in France are high and can range anything between 10 per cent and 18 per cent of the house price. Buying property in Spain will cost you additional valuation costs £100. Loans in Spain should be signed by the public notary and cost you around £580 on a £45,000 mortgage. So think, before you take a leap!