What are the associated costs in purchasing a home?
June 29, 2015
There are a myriad of associated cost in purchasing a home! Outlined below are some of the costs that a borrower may need to pay.
- Stamp duty on the transfer of the title of the home or block of land into your name. In a number of Australian States, First Home Buyers and or/owner occupiers may get some stamp duty relief. For example, in West Australia, First home buyers may qualify for the following stamp duty relief, i.e.
- House up to $430,000 purchase price the purchaser pays $0 stamp duty
- Land up to $300,000 purchase price the purchaser pays $0 stamp duty.
- Settlement Agent Fees are another fee that the borrower will encounter. Settlement agents will manage the conveyancing of the property through to settlement. There is a standard schedule of fees depending on the price of the property, but the fees are negotiable due to the competitive nature of the industry.
- Transfer Registration Fees is a Government fee a borrower must pay to register the “Transfer of Land”.
- Water and Shire rates are payable in advance and they generally come due July/August each year. Hence, you are paying rates for the forthcoming year. Depending upon what time of the year you buy will dictate how much you reimburse the vendor of the property.
- You should always leave a little aside for miscellaneous expenses such as insurance (home and contents), moving expenses (if required), getting the telephone connected (if required) plus any other little expenses that may pop up.
- Lender Application Fee may be charged to you. If the lender of your choice does charge a fee it would cover such expenses as:
- Lender Establishment Fee
- Valuation Fees
- Documentation Preparation Fee
Due to the competitive nature of the industry, many lenders do not have an application fee
- Mortgage insurance is another fee that you may pay. Generally, insurance is required on your loan if the lender advances you greater than 80% of the purchase price. The insurance policy protects the bank should the borrower default on the loan and the lender cannot recoup enough from the sale to payout the loan. The insurer will payout the shortfall from the sale of the property to lender and then attempt to recoup that shortfall from you the borrower.
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