16 August 2018
We all know that buying a home involves is one of the biggest financial decisions you will make, but very few people are aware of the actual costs. Here are a few costs that you should be aware of when buying your new home:
State Taxes, Duties and Fees
Stamp duty, mortgage registration, mortgage stamp duty and registration fees are State by State based and depend on where the property is located. Stamp duty is applied in all States, although different State Governments have different ways in which they calculate those fees. Note that some States have different exemptions or reductions on stamp duty which may be applicable to you.
Depending on your specific application, different fees may be applicable to your loan which can be negotiated. Sometimes, these fees may be waived or reduced. However, you should be aware that some lenders that waive up-front fees will offer you a higher interest rate or higher ongoing fees. Ensure that you are aware of the fees in your loan search so that you can factor these costs into your budget. As fees may differ by lender and product, it’s difficult to provide guidance on what each fee may be. Some of the most common fees include:
- Loan application and establishment fees
- Service and valuation fees
- Legal and accountant transaction fees
- Break costs
Solicitors or conveyancers are usually engaged to assist you with the property exchange paper work and to help you legally settle on your purchase. Legal costs depend not only on the State you live in, but it is also influenced by the property’s value. As a general guide, these costs can range from $1000 plus disbursements to over $3000, so, it is useful to get different quotes.
Building Inspection Reports
A building inspection report may be a condition of a loan approval. However, it is recommended that all potential buyers undertake a building inspection of their chosen property. Typically, inspection reports range from $250-$500.
There are many other costs involved with your purchase, which are dependent on your own situation, for example utility connection costs, telephone connection costs, strata costs, and insurance. You should consider these smaller items in addition to other costs.