The Added Costs Of Purchasing A Property
Purchasing a property is always a rewarding experience. However, the cost of the property itself is not the only amount you need to consider. When buying a new home, keep these costs in mind:
Real estate agent costs when selling your old property
If you are selling one dwelling and buying another, there will be costs involved with selling your old house with a real estate agent. Agents charge a commission on the value of the home. This is usually between 2% – 3% of the sale price and should be a considered cost when moving house.
Government Fees & Charges
Government fees and charges when purchasing a new house include stamp duty, mortgage registration and a title search fee. Stamp duty is by far the most expensive of the three. For example stamp duty on a $500,000 home is roughly $17,000.
When moving into a house, you don’t want any unexpected visitors such as mice or ants. To avoid this, getting a pest inspection is essential before you sign any kind of contract. In some cases, the seller of the home will pay this for you.
Want to know if you are paying the right amount for the property? A property valuation will cost a couple of hundred dollars yet can give you great clarity on if you are paying too much for the house.
With a new house comes a new mortgage. In most cases, there will be a loan application fee of around $150.
Lenders mortgage insurance (LMI)
If your loan to value ratio is above 80%, then LMI will be payable. See our dedicated LMI blog here and get all the details on how LMI is calculated and how to avoid paying it.
Moving from one property to another? Keep in mind the removalist costs of getting your possessions taken to your new property. Depending on how much stuff you are getting moved, a removalist can cost around $600 per day.
Ways to reduce these costs and fees
Although some of these costs cannot be avoided, there are some ways to reduce them or to save in the future. This can be done by:
– Some fees, such as stamp duty, are based on a percentage of the value of the house. In these instances purchasing a cheaper property or negotiating down the price of the property will save you paying more in fees.
– Obtaining a lower home loan rate in the process of purchasing your new home. Whilst getting a better home loan rate is not a way to reduce fees when buying a house, it is, however, a way to set yourself up to save in the future. Getting the wrong finance could cost you more over the life of the loan than all the other costs put together.
Moving house? Why not switch to a new home loan and save! Make a free enquiry today and find out how SwitchMyLoan could help you get a better rate.Get me the best rates!
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