With so much information out there in the real estate market, many homebuyers don’t feel informed about the property purchase process and associated costs. When buying a home, it’s not just the property you need to pay for.
Your deposit being the main cost is one thing but here are other costs you need to be aware of as a homebuyer:
1. Home loan application fees
It’s likely you will have to pay an application or loan establishment fee with a new home loan. The cost of this fee varies on the lender but it can be as much as $1,000.
2. Lenders Mortgage Insurance (LMI)
Lenders Mortgage Insurance (LMI) is to insure your lender against any loss incurred if you default on your home loan. It is also a requirement on home loans when you borrow 80% or more of the property value.
3. Stamp duty
Stamp Duty is a state government tax . It’s a large cost and is based on the purchase price of the property and paid prior to the settlement. If you are a first home buyer, you could be entitled to stamp duty concessions.
4. Mortgage registration fee
The Land Titles Offer require an admin charge for your property purchase. This fee is charged for registering the mortgage on to the certificate of title for the property. The fee differs depending on your state from $85 to $125 per registration.
5. Legal or settlement fees
Your solicitor or settlement agent will charge you a fee to carry out the legal work on the property transaction. Be sure to ask about the costs of searches, settlements and disbursements which could be additional costs on top of your settlement fee.
6. Pest / building inspections
You are usually required to arrange pest and building inspections by qualified inspectors before exchanging contracts. Be sure to get a few quotes and shop around.
7. Insurance
It is usually a condition of the loan settlement that your lender will require all security properties are covered under a building insurance policy.
8. Other costs
There are some other ‘hidden’ costs that you should be aware of when purchasing a property including:
- Moving costs
- Furnishing
- Home and contents insurance
- Council rates and strata fees
Before buying a home, it’s wise to work these additional costs into your budget, so you know what to expect and know how much you can spend on your property! Focus Property Wealth can help you through every step of the property purchase process and take the stress out of buying your first home.
For more information complete the inquiry form above or contact us today on (08) 6162 6577.