Buying the right house is a process that requires a lot of time, energy and financial resources. In addition to the price of the real estate itself, it will also require some additional expenses. To be aware of these early costs in advance, you can ensure that your financial situation will not be caught unprepared when you encounter the desired real estate.
1、Property Purchase Deposit
The largest and most noteworthy expense is the deposit. Of course, this cost will vary depending on the type, location, size, and value of the property you purchase. The goal of most buyers is to save a deposit of at least 20% of the house price to avoid any additional costs, such as Lender Mortgage Insurance (LMI). With the rise of real estate prices, saving this amount may be a difficult task.
2、Property Inspections
Before purchasing a property, the purchaser will usually require a property inspection to make sure that the home is in good condition and structurally sound. The usual inspections include:
Building inspection: covers the structural integrity of the property to ensure there are no issues, as well as any visible defects that need to be repaired. It can typically cost around $200-$1,000.
Pest inspection: ensures that there are no current issues due to pest infestation, as well as identifying if there have been any previous pest problems. It can typically cost around $150-$300.
For strata title property, a strata report is also recommended, as it will tell you the major building defects or unresolved legal issues. It normally costs between $200-$300.
3、Home Loan Application Fees
When you apply for home loan, lenders will charge application and establishment fees for your loan. While some lenders may waive the fee, prices typically vary between $395 - $600. Additionally, there may be extra costs like valuation fees and land & title office charges. You can consult the lender or your mortgage broker for the specific fees & charges.
4、Lender Mortgage Insurance (LMI)
Lenders Mortgage Insurance was designed to protect the lender in the case the borrower defaults on their home. LMI is typically charged when you borrow more than 80% of the property value. In other words, if your loan-to-value ratio (LVR) is no higher than 80%, you can save on this fee.
5、Transfer Duty
Transfer Duty was called stamp duty. It is a one-time government fee. When you buy land or property and some other assets, you need to pay transfer duty. This is the tax levied by the Australian state and territory government on all legal documents, contracts and trusts involved when purchasing assets or transferring the legal ownership of assets to you.
6、Legal Fees
Transfer of property ownership contracts can involve complex legal requirements. This means you’ll need to hire a solicitor to make sure all contracts and documents are up to scratch. In Australia, solicitors will typically charge around $1500-$2500 per property settlement.
7、Moving Fees
If you plan to move into a new house, you need to consider various expenses. These include moving services, cleaning services, moving packaging materials, purchasing furniture and other household necessities, etc. These costs depend on the specific circumstances of each family, but they cannot be ignored.
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