Becoming a homeowner is a huge life achievement. You’ve managed to go through the loan application process, saved up a big deposit, and found a house you’ll call home. However, owning a property is not just about mortgages, there are other hidden costs involved.
To know exactly what these hidden costs are, let’s take a look at some common costs of owning a house that many home buyers are unaware of:
Stamp duty is a huge cost that would surprise any home buyer who didn’t do their research. It typically amounts to tens of thousands of dollars, depending on your location, the type of property, the purpose of your property, and the value of the property. Luckily, we have a stamp duty calculator you can use to quickly estimate the cost of your stamp duty.
Lenders Mortgage Insurance
You only need to pay for Lenders Mortgage Insurance (LMI) if you don't have a deposit of 20% of the property value. LMI is insurance for your lender in case you default on your loan. To avoid paying LMI, make sure that you don’t borrow more than 80% of the property price.
Conveyancing is the legal process of transferring property ownership to another person. It’s possible to DIY this but it’s much better to hire a professional to avoid mistakes. Conveyancing fees can range from $1,000-$2,000 depending on the complexity of the work.
Pest and Building Inspection
You don’t want to live in a pest-infested or structurally-damaged house. You have already spent a lot on the house, so you want to make sure that there are no hidden issues. To know if your house is structurally sound, you can get a pest and building inspection. This can cost from $300 to $500.
Home and Contents Insurance
Your home is your greatest asset. To protect your asset, you need to get home and contents insurance as soon as possible to make sure your property is covered from day one. The price of the insurance varies because you have the option to get only home insurance, contents insurance, or both.
If you’ve gotten used to having a property owner taking care of your lawn expenses, then you’ll be surprised at how much equipment is required to maintain your lawn and other landscaping. The cost of landscaping will vary depending on the size of your lawn and the services required to maintain it.
Make sure that you factor all of these into your budget before taking out a mortgage.