Buying A Property? Costs You Need to Budget For
Adelaide mortgage broker Dom Cassisi lists the broad costs associated with buying a property in South Australia.
Think you have enough money to pay for a house? Have you considered all of the costs?
Buying a property includes so much more than just the ticket price, so to speak. There are several fees associated with the purchase of a property. When you’re expecting these fees they won’t come as such a shock, and you’ll be able to plan for them. Use the following list to ensure that you are prepared for all the associated expenses before you tackle a new property purchase.
Expenses to be ready for
This is the big one. All other costs are relatively small by comparison. Stamp duty rates vary between state and territory governments and also depend on the value of the property you buy. You may also have to pay stamp duty on the mortgage itself.
Typically ranging from $1,000 to $1500, these fees cover all the legal rigour around your property purchase, including title searches.
This should be carried out by a qualified expert, such as a structural engineer, before you purchase the property. Your Contract of Sale should be subject to the building inspection, so if there are any structural problems, you can still back away from the purchase without any significant financial penalties. A building inspection and report can cost up to $1,000 depending on the size of the property.
This inspection should also be carried out before purchase to ensure the property is free of problems, such as white ants. Your Contract of Sale should be subject to the pest inspection. This way, if any unwanted crawlies are found, you may have the option to withdraw from the purchase without any significant financial penalties. Allow up to $500 depending on the size of the property. Your real estate agent will help you to arrange this inspection by giving access to the property. Usually, the pest company will invoice you directly.
Most lenders charge establishment fees to help cover the costs of their own valuation as well as administration fees. Your broker can let you know what your lender charges are, but it’s safe to plan on budgeting about $600 to $800.
Don’t forget to factor in the cost of a removalist, if you plan on using one.
Mortgage Insurance Costs
If you borrow a value that’s greater than 80% of the purchase price of the property, you’ll also need to pay Lender Mortgage Insurance. You may also choose to take out Mortgage Protection Insurance. If you buy a strata title, regular strata fees are payable.
You will need to include council and water rates along with regular loan repayments. It is important to also take out building insurance and contents insurance. Your lender will probably require a minimum sum insured for the building to cover the loan. Don’t forget to also take out enough building insurance to cover what your actual maintenance expenses will be.
When the time comes to start the process of buying property, talk to Funding Options. Meet our team and get started with a no obligation discussion. We will provide you with the customised advice and recommendations you need. Call us today on (08) 8366 0822 or send an email.