The hidden costs of buying a home add up fast, but luckily we've got the lowdown.
Congratulations! You’ve saved a deposit and you’re finally ready to buy a house. We’re proud of you for skipping the smashed avo (kidding!!!).
It’s definitely time to celebrate, but it’s super important to make sure you’re aware of the hidden costs of buying a home before you pop the champagne.
Did you know that the extra costs involved in buying a property can end up costing some people more than 10% of the purchase price? That’s a pretty decent chunk of cash! And that’s exactly why it’s so important to go into the purchasing process with your eyes wide open.
Luckily, we’ve put together a list of the top seven hidden costs to consider when you’re buying a house in Oz to help widen those peepers and make sure you’re prepared.
Pre-purchase building inspections can happen before you put in an offer, or you can put in an offer contingent on the results of the inspection. The purpose of a building inspection is to check for structural problems like cracked walls or faulty roofs… stuff you wouldn’t notice straight away but would cost you in the long term. It’s a good idea to bundle your building inspection with a pest inspection to look for termites and other creepy crawlies.
How much? $600+
We’re not gonna lie, stamp duty is a big one. What is stamp duty on property? It’s basically a tax state and territory governments charge to process property sales, and it’s an upfront cost you usually can’t add to your home loan. We recommend using the stamp duty calculator for your area to get an idea of how much you’ll need to pay.
How much? Around 5% of the property purchase price.
One of the cheekier hidden fees of buying a house, loan application fees are when your lender of choice just decided it can charge you extra for applying for or commencing a loan. This can be a fixed fee or a percentage of the loan amount.
How much? This one depends on your lender. It could be a few hundred dollars or $1000+.
Another mortgage-related fee? Wild. This one comes from your state or territory government though, to cover the cost of registering your mortgage under your name.
How much? $295 - $4K+, depending on where you live.
LMI is another big one, but the good news is there are ways to avoid it. What is LMI in a home loan? Put simply, it’s a premium you’ll need to pay if your deposit is less than 20%. LMI covers your lender, just in case you can’t pay back your loan.
How much? Thousands. The bigger the loan and smaller the deposit, the more LMI.
Conveyancing fees are another extra cost of buying a house. These fees cover the cost of hiring a conveyancer to review and draw up the necessary contracts and paperwork for the sale.
How much? $1.5K-$2K
Sign up for Flux and join 100,000 members of the Flux family