13 Mar 15
The idea of buying your own home is an exciting prospect, and everyone dreams of the security of knowing that they are paying off their own home rather than someone else’s mortgage. Many people go into it with the misconception that the price tag on the home is all that they need, and they are disappointed to find out that there are other costs involved. At All Residential Real Estate we recognise that knowing what to expect helps you to be prepared for what may be required when you embark on the journey of buying your first home.
Depending on the lender, some home loan applications can incur a fee for putting in the application, which can be anywhere up to $1,000. When shopping around for the home loan that is right for you, be sure to ask whether there is a home loan application fee, and what it is.
When buying a property one of the largest costs that you will incur is the state government tax known as ‘stamp duty’. This is a one-time fee that is calculated based on the price of the property you are buying, and can be offset with ‘first-home owners grants’ or other concessions, depending on the state that you are in.
When borrowing finance from a lender to purchase your own home, the LMI, or Lenders Mortgage Insurance, provides a safety net to insure them if you default on your loan. This is incurred if you are borrowing more than 80% of the purchase price of the property. The LMI is usually added to your home loan so you will not need to pay it up front.
All first home buyers are required to pay an administration charge imposed by the state government for the lodging of paperwork relating to registering the lenders mortgage on the title of the property. The name of this fee varies from state to state and it can also be known as a Land Titles Office tax. It can be anywhere from $80-$125.
The legal paperwork involved in buying a home needs to be done by a solicitor or conveyancer and they will charge you a fee for this work. There may be costs for searches, settlements and disbursements, so be sure to ask for these costs before you employ them to do the work for you so that you know what you are in for.
Your lender will require that you have building insurance on the property as a condition of the loan settlement, so this is another cost that will be incurred before you can move in and start enjoying your new home. Remember, this will be an ongoing cost too.
With our many years of experience in the business, All Residential Real Estate knows that it is in your best interests to get a pest and building inspection by qualified inspectors before you sign any contracts. If there is an issue with pest infestations, the structural integrity of the property, or if it does not comply with building regulations, you will be the one who is left with the bill if you have not done your homework.