Cost components of a home purchase

There are a number of expenses involved apart from the price of the home during any purchase. Our experienced broker will provide you a full explanation of the costs (i.e. government fees, insurances etc.) and exactly how much would need in your specific case. We are providing some of these key cost components below to provide an overview.

Application fee

Typically lenders charge this fee to process the loan application. You should allow for up to $750 for this fee.

Lender’s Mortgage Insurance (LMI)

The LMI is a one-off fee which will be charged by the lenders when the deposit for the home will be less than 20% of the property value. Typically lenders allow to include this fee in the loan.

Property Valuation Fee

Your chosen lender will arrange a property valuation before processing your loan. Keep provision for at least $300 for this free.

Property Inspection Fee

It is important to conduct a pest and building inspection before a purchase. The reports will uncover defects or pest related issues that might prove costly to fix in the long run. The cost of the inspections will depend on the size and location of the property.

Stamp Duty on Property (Government Charges)

Stamp duty on property is a tax payable to the government by the buyer and varies from state to state and is calculated on the price of the property. This tax has to be paid whether or not the loan is financed by a mortgage.

Mortgage Stamp Duty & Mortgage Registration Fee

These are fees payable to the government. Mortgage Stamp Duty varies from state to state and depends on the loan amount whereas the Mortgage Registration Fee has to be paid to the government for registering the application.

Legal Fees

Solicitors or conveyancers provide some important services like – checking the contract to make sure there are no legal pitfalls, coordinating with the seller’s solicitor and making sure that the settlement takes place without issues. Though it varies from state to state but you should allow for up to 2% of the property value for legal fees.

Costs of Moving to the New Property

You need to factor in a number of costs in your plan to move to your new property. These might include home content transfer, utility connections – gas, electricity, TV, Internet, council and water rates redirection. Our advice is to compare between 3-4 quotes before deciding on one for home content removal. Also make sure you ask about insurance as companies typically provide insurances covering a percentage of the value of your goods.