At Stars Broking we love surprises! However, some surprises aren’t so pleasant… like coming across an unexpected cost when purchasing a property!
To help you avoid any unpleasant surprises, we have put together our guide to the added costs of purchasing a property:
Stamp duty must be paid in order for mortgage documents to be legal. It’s essentially a tax levied by the state or territory government on the purchase value of the property or the market value. Therefore, it is based on whichever is greater.
The legal transfer of ownership of the property will require a solicitor, conveyancer or settlement agent. They will perform property and title searches. These ensure the seller is entitled to release the property. This may be by checking the strata body corporate records, for instance.
Whilst pest and building inspections are an additional cost. The cost is money well spent and can save you money in the long run. A major building problem is not a discovery you want to make after the purchase is complete. Inspection costs can vary and are often dependent on the size of the property.
If you are a first home buyer, this is one cost you don’t need to worry about. However, if you’re selling your current home to buy another, you’ll probably have to take these fees into account. Agents fees and commission is usually charged as a percentage of the sale price.
Lenders have application, valuation and settlement or loan approval fees. These vary depending on the lender. Finance Brokers are familiar with these fees and can help you take them into account when choosing a lender.
Depending on your loan-to-valuation ratio (LVR) you may be required to take out lenders mortgage insurance (LMI). Although the borrower pays for it, LMI is not insurance for the borrower. It protects the lender should you default on the loan. Besides that, you may also need building insurance if you are not purchasing a strata property.
Other costs you may want to factor into your budget when looking to purchase a home include moving costs, council rates, strata fees, renovations and furniture.
With so many things to consider, it can feel overwhelming. A Finance Broker will make sure you understand the finer details of financing your purchase. Want more information? Click here to get in contact with expert broker Marco Scannone today.