When you buy a home, you need to budget for fees, taxes, insurances and other costs too. We’ve listed the main ones below. Your Smartline mortgage broker can help you work out exactly what you’ll be up for.
Loan application fee
Also called an establishment fee, you pay this to your lender for processing your loan. The price varies from lender to lender, but shouldn’t be more than $750.
Your lender will arrange a valuation of the property your want to assess its value – allow approximately $250 for this.
Lenders’ mortgage insurance (LMI)
This one-off fee, paid by you, protects your lender if you fail to pay your loan and the property has to be sold. If you borrow more than 80% of the property value, you usually need LMI.
Property Stamp Duty
This tax is payable to the Government on most property purchases. The amount varies from state to state, and also depends on the value of the property.
Mortgage Stamp Duty
This fee depends on the size of your loan and is different from state to state.
Mortgage Registration Fee
This is a charge made by the Government to register your mortgage document.
GST does not apply to all properties, only to those built after 1 July 2000, and to new house and land packages. You won’t have to pay GST on a pre-owned property, and it doesn’t apply to your loan repayments, bank charges, residential rents or council and water rates.
Fees for solicitors and conveyancers vary from State to State. They should include checking the contract, carrying out searches, and generally making sure that the transaction goes smoothly.
Having your property inspected is an important element of the buying process. Costs will depend on the size and condition of the property, and ease of access to concealed areas.
Unless you have really generous friends Get three or four estimates, and don’t forget to ask about insurance – usually a percentage of the value of your goods.