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What is the Cost of Selling my House?

What is the Cost of Selling my House?

If you are thinking about selling your house to raise money to offset your debts, it is important to keep in mind the cost of selling. In addition, you also need to explore several smart ways to save money on the major financial expenses. Otherwise, you will be surprised at how much you selling your home will be an expensive business.

With the many agencies and factors involved in the process of selling a house, it is more than just naming price and finding a buyer who is ready to buy. Even then, when you take time to research and prepare adequately, you will know the costs that are involved and how to cut down the amount. Here are the main expenses related to selling your house and ways of reducing them:

  • Estate agency fees – This is a major cost when selling your house. Estate agency fees varies depending on the kind of agent that you are working with. A high street agent for example will charge you a commission of up to 3 percent of the selling price.

If for instance, your house is selling for £219,000 and your estate agent is charging you a 2 per cent fees, you might end up giving then about £4,380. Consequently, if your house is worth much more the agency fee will definitely rise.

However, you can save on this fee by opting for a fixed agency fees that you agree upon upfront before instructing them. This way, you are guaranteed of a good return from the sale. Alternatively, you could opt to use an online estate agent that will potentially save you money. It is also the simplest way of reducing the cost of moving.

  • Removal costs – Although you may be keen on negotiating the estate agency fees, you also need to keep in mind the removal costs when calculating your budgets. In addition, depending on your furniture and the distance to your new home, the price could rise from a few hundreds to several thousands of pounds.

You need to take into account whether you want the packing services or not because this is likely to bump up the price.  Thus, you will do well to reduce these costs by shopping around. You can also use comparison sites to see how much it will cost you. If you are not moving a lot of stuff and you are willing to do some legwork, then you will certainly pay less.

  • Solicitor’s fees – While the buyer will foot the charges for the stamp duty, survey as well as searches, you need the services of a licensed conveyancer or a solicitor that will act on your behalf and handle all the legal issues associated with selling your property.

Although you cannot get around this, you should expect to pay between £500 and £1,500. However, this depends on how complicated the sale process will be. You could also reduce the solicitor’s fee by using a solicitor from outside the capital, compare quotes or using price comparison sites to ensure that you get the best deal possible.

Other unexpected costs

The cost of selling your house does not stop at the estate agency fees, removal costs and solicitors fees. Therefore, the law requires you to provide an energy performance certificate (EPG) and provide information about the energy efficiency of the property.

You will do well to use assessors who are accredited to do the required survey. While your estate agency can arrange for one, you are better off organizing it on your own.

If you have large appliances that you are willing to get rid of and you cannot take to the recycling centre on your own, you need to pay a small charge to your local council so that they collect and dispose them on your behalf.

 

With Low Interest Rates, Does It Make Sense To Pay Off Your Mortgage Early?

With Low Interest Rates, Does It Make Sense To Pay Off Your Mortgage Early?

For the past six to seven years, mortgage rates have averaged less than 5%. Many argued there’s no better time to pay off your mortgage than now, especially in an economy that is unpredictable.

It is an appealing proposition as you’re able to shave off significant amounts on your balance if you pay earlier than scheduled. That would after all, seem the goal of lenders: to encourage borrowers to reduce their monthly payments with lower balance payments.

For example, using your mortgage calculator, if you’re on a £150,000 repayment mortgage at a consistent rate of 3.5% spread over 40 years, but choose to pay a reduced payment period of, say 25 years, it will cost you £225,300, instead of £279,000. That means you’ll save a hefty £170 on monthly payment!

Really, no one wants to be indebted longer than necessary and watch it accumulate with interests over the years. But even if you have some free money lying around or got some financial windfall, paying off your mortgage early isn’t always a smart decision. Besides, it could leave you financially drained or left with limited liquidity.

So, if you’re considering offsetting your mortgage balances early, here are reasons why you should review the plan.

Pay off Your More Expensive Debts First

Mortgages are called ‘good debt’ for a reason. They are properly spaced out for convenience and ease of payment, very much unlike credit cards, store cards or unsecured loans with significantly higher interest rates that cost you an arm and a leg.

You should focus on offsetting your more expensive debts that costs you a lot to pay over a long time.

Invest Any Free Money into Your Pension Scheme

Rather than pay off your mortgage from any extra saving or free cash you’re fortunate to get, why not put it in a scheme that rewards you better and helps you save more in the long run? For example, the pension scheme is tax-efficient because the government contributes to your savings while also offering you tax relief.

If you don’t have a pension plan and have some money to spare, you should think of opening one or let your company set up one for you and then invest the money there. Your employer is also obligated to contribute to your pension. This way, your pension savings will double and you could guarantee a more secured future.

Check to See if There are Better Options on Savings Rates

Investing your money into a pension scheme is great idea. However, take your time to review your existing pension plan to see if it’s the smarter option or if it’s better to explore other savings options. That is if the savings offers you a better deal than what you’re paying on your mortgage. This is the time to do your math and make comparison, after factoring in tax deductions on savings.