Are you aware of the hidden costs involved in buying a house? You will not only pay the contract price when you buy a home. You’ll also need to know about hidden fees. You can then adjust your budget, especially if you are a first-time home buyer.
It is essential to be aware of all hidden costs when purchasing a property. You need to ensure you have enough money in your account in order to complete the purchase of the property without delay.
Stamp duty is the first thing we need to discuss. Stamp duty is a government tax that you must pay for the purchase of a property. It’s also called ” Land Transfer Duty.” The stamp duty that applies to your purchase of property depends on the specifics. The stamp duty rate depends on your location, the type of property you’re buying, and its value. You can buy a home for the first time as an investment or owner-occupied.
In general, stamp duty must be paid within 30 days after settlement. It is unlikely that you will be able to defer the payment.
Understanding the stamp duty concession and exemption is important in order to determine if you qualify for these benefits. If you’re a first-time home buyer in Victoria, and your property is valued under $600,000.000, then you won’t have to pay any stamp duties.
Try our Stamp Duty Calculator on the Credit Hub Website to find out roughly how much you will need to pay, or contact us to discuss your situation.
Conveyancing and legal fees
We recommend contacting, and hiring a conveyancer who will do the entire work from start to end. Your conveyancer can give you detailed legal advice on ownership and help with the legal paperwork.
Fees can vary from $500 up to $3,000 depending on what level of service is required. A solicitor will usually charge more than a conveyancer. My experience as a conveyancer strongly recommends that first-time home buyers have their contracts reviewed before signing.
Contact us today to learn more about our conveyancing services in Point Cook.
Building and pest inspection costs
Building and pest inspections, as we discussed in our last blog, can protect property buyers against those properties with faults by revealing hidden or latent defects. This is especially important when it comes to old properties.
I’ve seen many people make costly mistakes later because they didn’t perform these inspections. You can negotiate the price of the house even if there are no major problems. I’d say that the money is well spent and should be spent regardless.
Mortgage registration fee
State and territory governments charge a fee to register the mortgage security. This is a small cost that home buyers often overlook because it is so low ($116.80 for Victoria). This fee is due when you establish or discharge a home mortgage.
Title Transfer Fee
The government charges a transfer registration fee for the transfer of title from the previous owner into your name.
The fee for registering a transfer in Victoria will be $96.10 plus $2.34 per $1000 of the purchase price, with a maximum fee of $3.606 as of 1 July 2018. If you buy a $500,000 property, the registration fee is $1,266.1.
Charges for Loan Applications
The loan application fee is an upfront fee that is charged to a borrower. This fee is charged to set up a mortgage loan. All types of loans may require loan application fees, which are due when you submit your loan application.
Fees are usually around $600 but can vary depending on the lender and loan. Some lenders may waive the loan application fee in certain circumstances.