Buying a home is both an exciting and a daunting adventure. You might think that the struggle is over after you’ve found your house and had your home loan approved. However, your journey to home ownership does not end there. There are still an array of upfront costs to take into account.
Here are the top ten common upfront costs when buying a home:
- Deposit: Whether you’re buying a house or a property investment, you will be required to pay for deposit. Most lenders will require you to put down 20% of the property price.
- Lender’s Mortgage Insurance: If you borrowed more than 80% of the property value, you’ll need to pay for Lender’s Mortgage Insurance. But if you were able to put down a deposit of more than 20% of the property value, you will not be charged for LMI.
- Stamp duty: This might be your largest upfront cost and can amount to tens of thousands of dollars. Stamp duty will vary depending on your state and territory and the value of your property. You can use our stamp duty calculator to get an estimate of how much you’ll likely need to pay.
- Legal and conveyancing fees: Sale contracts, mortgage paperwork, and other legal documents will be done by your solicitor or conveyancer.
- Loan application fee: Some financial institutions will impose an application fee when you apply for a loan. Other upfront fees a lender might charge you are valuation fees, and settlement fees.
- Pest and building inspection: Nobody wants to live in a home where pests or defects exist, so this is essential when buying a property. The cost can vary depending on your location and size of the property.
- Moving-in expenses: Another cost that can add up is removalist fees. These will depend on how far you’re moving and how much stuff you have.
- Utility connections: Connection to electricity, telecommunication, water, and gas are some of the things your home needs.
- Home and contents insurance: Your home is a valuable asset, you will need to protect it by having it insured.
- Quick repairs: There might be some minor repairs and maintenance needed after you have moved into your new home. You might have overlooked some things, so it’s best to have some money set aside in case some quick repairs are required.
These are just some of the upfront costs when buying a home. Be sure that you’re well-aware of all the associated costs before purchasing a property.