Extra Costs to Consider When Buying a Home

8 June 2021

Extra Costs to Consider When Buying a Home

If you’re thinking of buying a home, it’s important to know all of the costs. In addition to your loan deposit, there are several upfront costs that you need to consider.

Transfer duty

Transfer duty is a government tax. It will probably be your biggest expense after the purchase price of your property. The transfer duty you need to pay in New South Wales depends on a range of factors. They include your home’s value, whether you’re a first home buyer, the type of property and why you’re buying it.

You can use our online calculator to work out how much transfer duty you will have to pay.

Legal fees

Although you can settle the legal aspects of buying a home yourself, it’s safer to get help from a solicitor or conveyancer. These professionals will help you with things like reviewing your contract of sale, transferring title documents and ensuring the seller is legally entitled to sell the property to you.

Building and pest inspection fees

Before buying a home, it’s extremely important to arrange a building and pest inspection. It will help you uncover any potential problems with the property to prevent you from making a bad purchase.

While you may be tempted to conduct an inspection yourself, you should pay a few hundred dollars for a professional inspection. That’s because any problems you miss may end up costing you thousands of dollars in the future.

Lenders’ mortgage insurance

Your lender will generally require you to pay lenders’ mortgage insurance unless you can afford a 20 percent loan deposit. This insurance covers the lender if you don’t make your repayments.

It’s possible to avoid lenders’ mortgage insurance if you’re a first home buyer who is eligible for the First Home Loan Deposit Scheme.

Home loan establishment fees

Home loan establishment fees will vary depending on your lender, but each one will charge some additional fees. These may include property valuation costs and a loan application fee , as well as document preparation and legal fees.

Home and contents insurance

Once you’ve bought your home, the next step will be to insure it. The cost of home and contents insurance will depend on which insurer you choose as well as your personal circumstances. Do your research and use an online calculator to compare the market and find the best option.

How we can help

If you’re thinking of buying a home, our experienced and licensed brokers at Wisebuy Investment Group can help you to find the right loan for your needs.

We service a diverse range of clients in Newcastle, Lake Macquarie, Port Stephens, the Hunter Valley and the Central Coast.

Contact us today for an obligation-free chat!