Posted on 24/02/2015 by Andrew Johns
When buying a home, the two biggest financial cornerstones we focus on are home loans and saving up for a deposit. So it's easy to overlook or get caught out with the other costs and expenses involved in your property purchase.
Here's a checklist of home buying costs to consider and factor into your budget to avoid financial stress:
1) Buyer Agent Fees - if you are engaging the services of a buyer's agent to locate and purchase a property on your behalf.
2) Building and Pest Inspections - it is highly recommended that you get building and pest inspections done by a qualified inspector before you commit to purchase. Building inspection fees generally start from a few hundred dollars, depending on the size and location of the property.
3) Legal and Conveyancing Fees - you will need to pay a licensed conveyancer or solicitor to guide you through all the legal processes of a property transaction (e.g. land title searches, make a strata report, drawing up Transfer of Land, etc.) and assist you in negotiating the best settlement terms for you, the buyer. Standard conveyancing fees are $900 on average plus out-of-pocket expenses.
4) Financial Fees - this can include a loan application or establishment fee.
5) Valuation Fee - if you choose to obtain your own valuation, it is recommended to use an accredited valuer.
- once the contract has been signed and the cooling off period begins
1) Deposit - this is one of the big ones that you've been saving up and budgeting for. Depending on what the contract stipulates, it can range anywhere between 5% to 20% of the property price.
2) Balance - the balance of the purchase price less deposit will be paid at settlement.
3) Lenders Mortgage Insurance - if you pay 20% deposit or less of the property price, your lender will require you to take up lenders mortgage insurance, which enables them to lend you a larger percentage of the purchase price. This can be included either in your upfront costs or in your loan repayments so that it’s spread out over the term of the loan.
4) Stamp Duty / Transfer Duty - click here for the latest Rates of Duties for WA as of 1st July 2008.
5) Property Purchase Registration Fees - a Transfer of Land needs to be lodged by your legal representative with the State Titles Office
6) Mortgage Registration Fees - new mortgage agreements need to be registered with the state authority government
And of course, you have your on-going homeowner costs to consider such as your mortgage payment, moving fees, utility bills, council rates or strata fees, insurance and maintenance/renovation.