Application & establishment fees, stamp duty + more.
When taking out a mortgage, many people forget to consider the associated fees and expenses. Here are some of the extra costs that you’ll need to consider when you take out a home loan.
Home loan application fees
Most lenders charge a home loan application fee. This can range from loan to loan, and covers:
-
Loan contracts
-
Property title checks
-
Credit checks
-
Attending a settlement
Mortgage fees and costs
-
Mortgage establishment fees – Lenders generally charge a mortgage establishment fee – a fee for setting up a mortgage.
-
Property valuation – A third party chosen by the lender, is appointed to determine the value of your land and improvements.
-
Mortgage registration – Your Mortgage deed needs to be registered with the government.
-
Mortgage stamp duty – Some State Governments charges stamp duty to register your mortgage.
-
Lenders mortgage insurance – If you don’t have 20% of the purchase price or the value of the property, the lender will require you to pay for a lenders mortgage insurance policy that covers their risk in the event you default on your repayments.
Property fees and costs
-
Building, Pest and Electrical Inspection fees – It’s wise to have your property inspected for any structural or electrical problems and for pests (e.g. termites).
-
Stamp duty – Governments charge Stamp Duty to transfer the ownership of a property.
-
Registration of transfer fee – The new owner of the property needs to be registered at the Land Titles Office.
-
Legal fees – You generally need to pay a Solicitor of Settlement Agent to handle the transfer of ownership of the property on your behalf
-
Home & contents insurance – Most homeowners insure their home and contents against a range of threats: burglary, fire, storm, etc. Lenders insist that your property is insured while you have a mortgage.
-
Life and income protection insurance – Borrowers should consider protecting their incomes and themselves while they have a mortgage.
-
Utility costs – Connecting electricity, gas and telephone can attract a fee.
-
Council Rates – Your local council charges rates to cover garbage collection and a host of other services.
-
Water Rates – The water corporation charges rates for the supply and upkeep of water to your property.
-
Body corporate fees – If you buy an apartment or Strata Titled property, body corporate fees are charged, and some fees can be significant – particularly if the building is in need of a major work (e.g. concrete cancer, security upgrade, new hot water system, etc) or if there are lifts, pools and other communal facilities.
-
Maintenance costs – Don’t forget to make provision for regular maintenance on your home – even if you decide not to undertake significant renovation.
To learn more about the hidden costs of buying a home, talk to us today on Phone 08 9200 2795.
Source: MFAA https://www.mortgageandfinancehelp.com.au/first-home-buyer-news/application-establishment-fees-stamp-duty-more/
Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA)
Important: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. Past performance is not a reliable guide to future returns.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author.
Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
