Costs of Buying a Home
Are you looking for a cosy one-bedroom apartment in a newly renovated part of the city? Or perhaps you’re picturing a quiet suburban four-bedroom home.
Regardless of the kind of property you want, there are other significant expenses that you should be aware of in addition to the down payment and mortgage. Consider them when you begin saving so that you won’t be surprised later.
Taxes & Government Fees
Outside of the deposit and mortgage, stamp duty is probably going to be your greatest expense. It is a state government tax that is calculated based on the cost of the property you purchased and is normally due within 30 days after settlement.
There are restrictions, but you might be able to raise your mortgage to pay for this expense. Additionally, if you’re a first-time home buyer, you can qualify for a stamp duty exemption, rebate, or other discount, such as the First Home Owner Grant.
Additionally, there is a cost for registering the title to your property with the land titles office in your state or territory. The inspection and value of a newly constructed home may be subject to GST.
Inspections
Before you exchange contracts, a building and pest check should be conducted. Make sure the building is physically solid and free of termites or other pests before purchasing it. Even brand-new homes may have a problem that only a specialist can identify.
Insurances
You may be required to pay a fee to offset the lender’s risk if you have a lesser deposit and must borrow a large share of the property’s worth, or loan-to-valuation ratio.
This safeguards the lender and is referred to as Lenders’ Mortgage Insurance or Low Deposit Premium. Whether this will apply will also depend on the specifics of your loan.
As a homeowner, you might want additional types of coverage to safeguard your house and its contents against theft, fire, and other perils.
Loan Costs
Making weekly, fortnightly, or monthly mortgage payments are only one part of paying off a home loan; there are also interest and other costs associated with the loan that must be paid.
