July 18, 2013
Whether it is your first home or maybe an investment property, buying your first home is a huge life step. Researching the market, deciding where and what you want to buy, saving your deposit. There is so much to do!! But it’s often the extra costs associated with home ownership that can be overlooked in all the excitement.
But what are these extra costs? On top of the usual bank fees the other costs include stamp duty, legal expenses, removalist costs, insurance, furniture, etc. that should be taken into consideration. The best way to keep on top of these added extras is to factor them into your overall budget from day one. Below we have listed some of the extra costs that you to plan for when looking to purchase that dream home.
Loan application fees. Also known as a loan establishment fee, this is payable when you take out a home loan.
Stamp duty. One of the biggest costs outside of a property’s purchase price is stamp duty. It is a state government tax that covers a range of transactional costs and is payable regardless of whether you’re buying your first or a subsequent property.
Title registration fee. This is a state government charge to register the transfer of title of the property from one person to another and the fees for registering a mortgage. The buyer meets these costs.
Lenders’ mortgage insurance (LMI). If you are borrowing more than 80% of the total purchase price, you may have to pay lenders’ mortgage insurance. This insures the lender against any loss incurred if the borrower defaults and the proceeds of an enforced sale of the security property are insufficient to clear the debt. Some lenders may enable you to add this to the loan (capitalise), depending on your loan size and deposit amount.
Conveyancer or solicitor fee. This refers to the fee charged by the conveyancer or solicitor that homebuyers engage to conduct the legal work involved in buying real estate.
Building insurance policy. As a condition of loan settlement, lenders will require building insurance to be taken out on all security The amount of the policy coverage required is the full insurable value of the property. Other things to keep in mind might include possible removal costs and extra funds for new furnishings for your new home!
Building/ pest inspections. These inspections are conducted by qualified inspectors before exchanging contracts, at the buyer’s expense.
Our local team will help guide you through the process, making buying that property easier. Contact Fi Manley at Mortgage Choice in Noarlunga on 0421 360 205. Or visit www.mortgagechoice.com.au/steve.pratt for more information. #fionamanley