
Application & establishment fees, stamp duty + more. When they take 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.
Most lenders charge a home loan application fee. This can range from loan to loan, and covers:
To learn more about the hidden costs of buying a home, speak to me today on 0411 600 210.
Dale.
Most lenders charge a home loan application fee. This can range from loan to loan, and covers:
- Legal contracts
- Property title checks
- Credit checks
- Mortgage establishment fees – Lenders generally charge a mortgage establishment fee – a fee for setting up a mortgage.
- Property valuation – A third party often chosen by the lender, needs to determine the value of your land and improvements.
- Mortgage registration – Your Mortgage deed needs to be registered with the government.
- Mortgage stamp duty – The government charges stamp duty to register your mortgage.
- Lenders mortgage insurance – If you don't have 20% of the purchase price of the property, the lender will require you take out lenders mortgage insurance to cover the risk that you might default on your repayments.
- Building inspection fees – It's wise to have your property inspected for any structural problems or 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 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. You need to insure the home while you have a mortgage.
- Life or income protection insurance – Borrowers should consider protecting the primary income earner while they have a mortgage.
- Utility costs – Connecting electricity, gas and telephone can be costly and generally involves the lodgement of security deposits.
- Council rates – Your local council charges rates to cover garbage collection and a host of other services.
- Body corporate fees – If you buy an apartment, 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)
- 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, speak to me today on 0411 600 210.
Dale.