The hidden costs of buying a property
Are you getting ready to take the plunge and invest in property? It can be an expensive enough ordeal with the listing price alone. And stamp duty can be around 4% of the listing price as an upfront cash payment if you aren’t a first home buyer that meets the criteria for stamp exemption.
So how much could additional related property fees cost as you get closer and after you have signed on the dotted line? It could cost an additional 1-2% of fees above stamp for related costs, excluding LMI (Lenders Mortgage Insurance). Below are some estimates of the possible costs.
Possible costs to consider
- Building Inspection – If you are buying a freestanding home: $600
- Strata Report – If you are purchasing a unit: $300
- First Quarter Strata Rates – If you are purchasing a unit: $800 – $2,500
- First half year Council Rates: $500 – $1,000
- Legal Fees: $1,500
- Pest Inspection: $300
- Loan package fee: $400
- Conveyancing fees: $500-$1,000
- First year’s home building insurance: $500-$1,000
- Moving costs: $500-$1,000
The costs above are indicative and the list is not exhaustive
Regardless of if you are looking to purchase an apartment or a house, you could be looking at well in excess of $5,000.
LMI – Lenders Mortgage Insurance
Lenders mortgage insurance could prove the expensive add on. For example, for a $450,000 loan on a $500,000 property, or 90% LVR, LMI could cost $9,900, almost 2% of the value of the property as a on-off upfront payment upon successfully taking up a loan when purchasing your property. Click here to see a LMI calculator.
Some of these costs are incurred before you have even made the purchase, so it is entirely possible that you pay for multiple pest reports or building inspections prior to successfully purchasing a property. Therefore, it is very handy to have built up a bit of a saving and investment kitty to be able to absorb some of these costs.
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If you would like to find out more about Raiz Home Ownership, please contact the team at home@raizhomeownership.com.au, or register your interest.
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