Buying a new home can be even more costly than you expect. There are lots of things you need to watch out and budget for.
Paying for your new home is the overwhelming cost, but there are many other areas of concern that you will need to budget for, including legal fees. You have to prepare for it, so that you can avoid experiencing difficulties in the first few years of owning your home.
Buying a home isn’t just about paying what’s on the property’s price tag. There are some extra costs all buyers should be mindful of.
It is useful to understand the hidden costs of home ownership and how much are they likely to amount you so you know what to expect and have funds in place.
- Legal fees usually vary depending on the value of the property or on the complexity of the structure. Some fees are computed on a sliding scale dependent on the value of the property you’re buying, so the more expensive the property, the higher the fees you can expect. Others are flat fee. Always ask your conveyancer upfront how they calculate their fees.
- Stamp duty is one of the many aspects of home ownership that can add thousands of dollars to the cost of buying a home. State and territory governments charge it so the amount you will pay depends on where your chosen property is situated. It will also adjust according to the purchase price of the property. It has a significant effect to the cost of your property so make sure that you have included it into your budget.
- In buying a property, you need a professional to help you transfer ownership of the property you are buying. There is a legal process involved known as conveyancing. It covers various search fees and the registration with the Land registry. How much it costs depends on the price of the home you are buying, including the searches you have done.
The conveyancer will be responsible in carrying out all the legal work that is necessary in buying your new home, and you should also be aware that the process includes a number of fees on which mostly will be linked to your conveyancer.
For more information, see why you need a conveyancer.
- Mortgage arrangement fees are often charged by mortgage companies, and can range from a few hundreds of dollars. Some lenders insist you pay the fees up front, while others add it to the mortgage.
- State governments also add to the charges and these rates differ between states and also change according to the economic climate. States will also tax on annual basis if you hold multiple properties, but is unlikely to affect you as a first homebuyer within Australia.
- When buying a home, there are some costs you already expect and some that can shock you. There are a handful of legal costs involved in a property transfer and one of which also includes Local Council Charges. The city, town or district where the property is located will impose property charges.