The Extra Costs You Should Account For When Buying Property
Buying a property is a big financial decision that requires a lot of preparation, with most of the focus rightfully being aimed at securing the best mortgage and making sure that you’re able to pay it off. However, your budget should extend beyond your initial down payment as there’s a little more that typically goes into buying a home, meaning that you might not be able to complete the process without factoring in some additional costs. Let’s take a look at some of them.
Stamp Duty
One of the highest upfront costs is stamp duty, a state government tax that’s calculated based on the price of the property at purchase and its location. Depending on where you are, how much you pay in stamp duty can vary widely, so it’s vital to do your research. First-time buyers and new-built homes may come with less stamp duty, but even then, they can add tens of thousands ot your total cost.
Legal Fees
If you want to make sure that the legal transfer of property goes smoothly from one person to another, then you need to have the right help on your side. A conveyancer helps you review contracts, conduct title searches, and carry out the settlement paperwork on your behalf. Given how potentially costly any mistakes in legal documentation can be, it’s typically better simply to set aside the budget for a reliable professional who can work on your behalf.
Building And Pest Inspections
Although it’s not a cost that every buyer decides to take on, it’s typically recommended that you hire home inspectors and pest control services to take a closer look at the property that you’re buying. They give you the best chance of more thoroughly understanding the structural condition of the property and checking for issues like mould, foundation issues, termite damage, and more. Skipping inspections to save money can lead to costly repairs later, sometimes amounting to tens of thousands.
Other Loan-Related Costs
If you’re financing your purchase with a mortgage, your down payments and loan repayments aren’t the only costs you need to consider. You might have to account for loan application fees, valuation fees, and lender’s mortgage insurance, an expense you typically have to consider if your deposit is less than 20% of the total value of the property. This is a financial protection for the lender that they often demand if you’re covering not as much of the total loan up front.
Ongoing Ownership Costs
Of course, beyond all of the costs of completing the sale, you need to make sure that you’re financially prepared for home ownership, as well. This includes not just your loan, but council rates, water charges, and home insurance, all of which can vary depending on your property type and location. You should also think about budgeting for upkeep or any repairs or changes you might want to make after moving in.
To make sure that your home-buying journey goes smoothly, it’s important to make sure that you have all of the above costs factored in before going ahead.
