Purchasing a home is a big step and requires a lot of planning to get the process up and running. For many of us, we have done it all before, so we will be better for the experience. But for some, including first home buyers, the whole process can be daunting and hard to get your head around. The most important thing to do is find out everything that is involved up front, so you know what you’re getting yourself into before you sign on the dotted line. A Mortgage Broker can help you through every step of the home loan process and get you started on the property ladder.
As a buyer, the first step is to make sure you have enough for a deposit to meet the lenders requirements. At a minimum, a 5% deposit is required, but in order to make the purchase viable, you actually need to have saved more than that to cover off stamp duty and other fees. Below is a list of the fees and charges that will need to be paid, on top of your normal 5% deposit.
- Stamp Duty
- Lenders Mortgage Insurance (LMI) – If your deposit is less than 20% of the purchase price
- Legal fees – Settlement agent charges
- Registration of title fee
- Document preparation fees
- Shire and water rates
Not all of the above apply for each buyer, however. For example, reduced stamp duty may apply for First Home Buyers if purchasing under $500,000 and no stamp duty is payable if a First Home Buyer was to purchase for under $430,000. If you can budget for each of the above, you will be well placed to put down an offer. Once you include all of the above fees, your initial deposit required could be up around 7-8% of the purchase price.
Obviously the higher deposit you have, the better off you will be, but if you are looking at a minimum deposit home loan, these fees and charges need to be considered, as they could be the stumbling block between buying your dream home or not.
If you are considering buying, or want to know more about all of the fees required in purchasing a property, please give Steve a call today on (08) 6144 3230 or email at email@example.com.