When you purchase property there are some one-off costs that you need to be prepared for, in addition to your Home Loan Deposit.
These include the government fees for the transfer of property title, and the loan establishment fees with your lender.
These additional costs usually come to about 5% of the purchase price of your property.
One-off home-buying costs include:
Stamp duty is a government fee calculated based on the market value of the property you’re purchasing.
Using the Stamp Duty Calculator you can get a rough estimate of how much the stamp duty for a particular property will be.
When property ownership changes, a Transfer of Land is lodged at the Land Titles Office in the State or Territory where the property is located.
There’s a fee that applies to this lodgement, which is paid by your solicitor or conveyancer, and included in their fees.
An important part of buying a property is making sure that you'll own it 100% at settlement.
Your conveyancer makes sure that this happens, performing the title search, carefully reading the contract of sale, and negotiating on your behalf.
If you aren't sure where to find a good conveyancer, you can ask your Home Lending Specialist for a local referral, or check out our business partners for a professional we've tested first.
This is a start-up fee to establish your mortgage that is charged by the lender when your home loan is approved and the funds are released. It usually falls due for payment at settlement.
If your ‘Loan to Value Ratio’ (LVR)is less than 80%, you will pay Lender’s Mortgage Insurance.
Lender's Mortgage Insurance is a fee to protect the lender if you miss repayments and replaces the equity you would hold if you had a larger deposit. It allows to you buy the home before you've saved 20% of the property value.
For more information on the Lender’s Mortgage Insurance, read on here.
Getting a building inspection done before you make an offer for a property, whether it's an auction or a private treaty sale, can save you thousands of dollars down the track on repairs or renovations that might need to be done.
If you're in a hurry to make an offer on a property that you love, make sure that the contract for sale includes a condition that the offer will stand subject to a satisfactory building and pest inspection.
If you can attend the inspection, you'll be able to gain a better understanding of the property as the inspector sees it.
A Building & Pest Inspection includes all of the major structural features of the property.
When you get the final report from the building inspector, you'll have a better understanding of what it means for you.
A comprehensive building inspection will assess the integrity of:
If you need a good building inspector your Home Lending Specialist can give you a local referral, or try one of our business partners for a conscientious building inspector we trust.
As soon as you sign the purchase contract, you'll have a financial interest in your new home, and full responsibility for the property.
This means it's essential that you have home insurance for the property before you sign the contract. Most banks make comprehensive home insurance a condition of the mortgage approval too.
Under a strata scheme, each owner owns a portion of the property, known as a 'lot'. This is your actual apartment, and is your personal responsiblity to look after.
You'll also have use of outdoor areas, and share common property with the other the lot owners; such as gardens, driveways, foyers and windows.
Responsibility for the external and outdoor parts of the property is shared by all of the owners and is managed by an owners corporation. Your strata fee is used by the owner's corporation to look after this shared property.
A strata fee covers the costs of building maintenance, building insurance, maintenance of common areas, an onsite caretaker or cleaner, communal electricity, water or council rates, and costs of management.
If you're looking at buying an apartment, make sure you find out how much the strata fees are, and what they include. You'll need to take these into account when you plan your budget to include your new mortgage repayments.
You'll also want to find out how you can participate in your strata community and be part of decisions on how the strata money is spent.
If you’re buying a stand-alone house you’ll need to include the Council fees in your budget.
You’ll need a bit of extra money for the costs of actually moving into your new home after settlement. Things to plan for include:
For a complete guide to moving, we’ve prepared a comprehensive checklist to make sure you’re ready to go.
As you can see, there's a lot to consider when you buy a property. We hope that you are getting a full picture of the home buying journey, and encourage you to get in touch with any questions that you might have.