The Hidden Costs of Owning a Home
You Need to Think About More than the Purchase Price
Did you know that the hidden costs of home ownership will cost you thousands of dollars? It’s true. The more your property is worth, the more you have to pay in fees. These costs even go beyond the property buyer’s agent fees.
I want to make sure you prepare for these costs. Here are a few fees that your buyer’s agent in Melbourne must make you aware of.
The Legal Fees
It’s not just your buyer’s agent in Melbourne who will offer guidance when you buy a home. You’ll also work with solicitors. They will help you navigate the complexities of your contract of sale. Many also provide conveyancing services.
You will spend anywhere between $1,500 and $3,000 on legal fees. Complicated deals generally demand higher fees. For example, purchasing via a trust costs more in legal fees than buying as an individual. Keep things simple to lower your legal fees.
The amount you pay in stamp duty varies depending on the state you buy in. However, you will have to pay it whenever you buy a home.
You can find stamp duty calculators online. However, it’s best to trust the guidance of your buyer’s agent in Melbourne. You may find your state has stamp duty exemptions in place. These exemptions come with conditions. If you meet them, you can save thousands of dollars.
Do not buy a property without having it professionally inspected. There are many issues that you may not spot on your own. The property may have a pest problem or damp issues. These cost a lot of money to fix.
A professional inspection will set you back about $400. It’s money well spent. Any issues the inspection discovers can knock money off the property’s asking price.
Lender’s Mortgage Insurance
One of the largest fees you’ll pay outside of the price of the property, Lender’s Mortgage Insurance (LMI) applies to all loans above 80% of the value of your property.
LMI protects the lender. It’s usually a multi-thousand dollar payment. Some lenders will waive LMI if you have saved a large enough deposit. They see large deposits as proof that you won’t default on your loan.
Loan Application Fees
Most banks will charge a fee for lodging a home loan application with them. This can be as much as $600. Thankfully, it’s a one-off payment. You won’t have to worry about it once you’ve secured a loan.
Some lenders will waive the fee in certain circumstances. This usually happens if you take a packaged loan, though it’s not always the case.
You’ll have to pay several fees to insure and register your new property. State registration costs $75. Title insurance varies but is often in the $300 to $400 range. This protects you from claims made against the title of the property you purchase.
Some lenders also charge for the preparation of documents relevant to your home loan. This can set you back another couple of hundred dollars. Not all lenders do this. Ask at the beginning of the loan process so you know what you will owe.