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Cost Involved
Along with the costs of checking out the property you are buying and physically moving from the one you are now in, there are a number of government fees, taxes, legal fees and lender fees incurred when you go for a home loan and buy a new home. Remember that most of these are paid before or around the time your property settles so your savings or loan will need to cover these amounts as well.
Typically, you would plan for these fees when you are purchasing:
Lender fees-
Many lenders will negotiate on fees, dependent upon your situation. Some may even waive some or all of the fees which relate to your loan. However, as a rule of thumb, the complete absence of up-front fees generally means a higher interest rate or ongoing fees.
ü Loan application fees
ü Loan establishment fees
ü Service fees
ü Valuation fees
ü Legal fees (mortgage-related)
ü Account Transaction fees
ü Exist fees
(Or deferred establishment fees)
It is difficult to give a guide to the amount for each fee, as they differ so much among lenders. By way of example, the application fee amount may be nothing or as high as $600, or more. It is extremely important to be very clear on these costs up front and ensure your broker negotiates where possible.
Stamp duty, Mortgage registration,
Mortgage Stamp duty and Registration fee.
These taxes/fees are state government-based fees and are applied accordingly to the law of the state where the property is (i.e. not the property that you live in, if you reside in another state). Each state government calculates these fees differently.
Stamp duty is payable in all states, but some groups such as those below are entitled to different exemptions or reductions on stamp duty:
Ø (all states) First-home buyers
Ø (Victoria) Home buyers with Concession cards
Ø (WA/NT) Principal Residence Rebates
Buying interstate with local security
If you use a NSW property as a security for the purchase of a Queensland property, the Queensland government will only recognise a portion of NSW mortgage stamp duty and will charge you additional duty. Not all states do this, but you should check.
Legal fees
When purchasing property, you would usually employ a solicitor or conveyancer to look after the property exchange paperwork. Dependent upon the value of he property and the state you live in, this can cost as little as $200 plus disbursements up to over $1000, depending on complexity. Get quotes.
Building inspection Reports (and structural)
Building inspections are highly recommended and are sometimes a condition of loan approval. It is always a good idea to have done irrespective of the lender’s loan approval conditions. Expect inspections to cost somewhere between $250-$500.
Pests & Termite Inspections
A pest and termite inspection typically costs between $200-$400, and is also highly advisable, if not legally required.
Moving Costs
Don’t forget to factor in the cost of mail redirection, furniture removal, connecting the power, gas and phone.