Many first homebuyers feel they do not get enough information about the property purchase process. If you happen to be one of them, this article is for you.
First, you need to get information from a trusted Victoria property broker. A professional can help you understand everything that’s involved in your upcoming property journey. For supplemental reading, logon to property websites and do some of your own research.
If you are concerned about the costs involved, as you should be, you need to keep in mind that it is not only the property that you will be paying for. Expect to spend beyond the original selling price of the home as you take into account the charges and fees associated with purchasing a property.
Here are some additional expenses you need to be aware of before paying the deposit on your first property:
1.Loan application fees
When taking out a home loan, you first need to pay an application fee. The amount varies depending on your lender, and it could be as much as $1,000.
If you pay a deposit that is below the minimum requirement of your lender (usually 20 percent of the property’s purchase price), you will need to pay a Lenders Mortgage Insurance fee, or LMI. While you are not required to pay this fee upfront because in most cases, it is added straight to your home loan, it is an additional cost you need to add to your payables.
What is it for? The LMI stands to protect lenders in case borrowers default on their loans. If you don’t want to pay this fee, you can avoid it by saving up for a bigger deposit.
One of the biggest fees you will be required to pay upon purchasing a property; this is a state government tax and is based on the purchase price of your home. First home buyers such as yourself are entitled to some stamp duty concessions, but this varies per state.
4.Mortgage registration fee
This administrative charge could be anything from $85 to $125 depending on the Land Titles Office imposing it in your state. Its purpose is to pay for the registration of the lender’s mortgage onto the title record for the property.
This fee is charged by solicitors or conveyancers for carrying out the legal work, including searches, settlements, and disbursements for home buyers.
While this is optional, it is a cost worth paying for because it is for your own benefit. Before agreeing to close any deals, hire a qualified inspector and have the property checked to make sure it is free from any infestations and is structurally sound. This will also help you determine whether the property complies with building regulations or not.
Part of loan settlement conditions includes having all security properties covered by a building insurance policy.
8.Hidden fees and charges
Other fees that may not be as well-known as the abovementioned include:
•Other insurance fees
•Council rates (and strata fees)