What fees should I pay for while buying a house?

Any general questions you might have in regards to loans and finance.
Post Reply
Bruce
Posts: 34
Joined: Thu Jun 20, 2013 6:21 pm

What fees should I pay for while buying a house?

Post by Bruce »

Hey there!

I want to buy a house in Adelaide. I am actually thinking about purchasing one that is worth $550,000. I have been told that I should expect to pay for some fees as well as bear some extra costs while buying a house. Does anyone have any idea on what these costs can be?

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7729
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: What fees should I pay for while buying a house?

Post by Otto Dargan »

Hi and welcome to the forums Bruce,

The Purchase Cost Calculator can help you to estimate the amount that you may need to pay to complete the purchase. Generally, you would be expected to spend up to five percent of the contract price on fees, duties and charges. This amount excludes the deposit amount that you would need to keep aside when applying for a home loan.

Those fees can include the following:
  • Purchase stamp duty: A tax levied by the state government on all property purchases. This can be one of the largest expenses while buying a house.
  • Mortgage stamp duty: A tax levied by the state government based on the size of the mortgage. Although, this fee has been abolished in most states now.
  • Registration fees: A government fee for registering your lender’s mortgage on the title of your property. In circumstances where the vendor has a mortgage on the property, they may charge the removal of their mortgage to you. This cost will then be reimbursed by the vendor at settlement.
  • Transfer fee: A government fee for registering your name on the title of the property and removing the vendor’s name.
The extra costs that you may need to pay and which are not included in the purchase cost calculator are conveyancing costs, inspections fees, loan fees and Lender Mortgage Insurance (LMI).

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Bruce
Posts: 34
Joined: Thu Jun 20, 2013 6:21 pm

Re: What fees should I pay for while buying a house?

Post by Bruce »

Well, how much will I need to pay for the LMI on the loan?

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7729
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: What fees should I pay for while buying a house?

Post by Otto Dargan »

Hi Bruce,

You are usually required to pay LMI when you are borrowing over 80% of the property value. There are some lenders who may waive your LMI for loans up to 85%. They may require your credit history to be perfect and you to be buying a new property. Refinances to purchase a property may also be accepted on a case by case basis.

You can try the LMI Calculator to estimate how much LMI you need to pay on your loan. Since every lender have different rates for calculating LMI, the amount may vary according to which lender you apply with. Nevertheless, you can still use this calculator to see and compare the full range of LMIs available from our lenders.

If you would like to know more about these then you can check out our website. We can also be reached on 1300 889 743 or you can fill in our free assessment form to see if you qualify for a loan or not.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Bruce
Posts: 34
Joined: Thu Jun 20, 2013 6:21 pm

Re: What fees should I pay for while buying a house?

Post by Bruce »

Well, that’s a good news. I have been meaning to borrow no more than 80 to 85%. Will figure out how much I really need to borrow and check the LMI calculator as well just in case. I’ll give you a call in a few days after that. By the way, thanks for your help.

Simon_Baker
Posts: 37
Joined: Mon Jul 15, 2013 1:09 pm

Re: What fees should I pay for while buying a house?

Post by Simon_Baker »

Hi, the house that I buy will be a first home purchase for me and I have heard that first home buyers can get a few exemptions. This means I may not need to pay so much while buying a house. I just want to know how much amount I can expect to avoid paying.

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7729
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: What fees should I pay for while buying a house?

Post by Otto Dargan »

Hi Simon_Baker,

It is true that if you are a first home buyer then you may be eligible for government benefits such as grants and stamp duty exemptions. If you are buying a property for more than $500,000, then you may find that the stamp duty cancels out the grant. This is why a lot of state governments have stamp duty exemptions. The minimum deposit that you need to pay will be greatly reduced with a stamp duty exemption.

Other than the government benefits, you may also be entitled to a discount on LMI. Selected loan insurance companies usually provide a 15% discounts on their LMI premium. This is however only offered through lenders who deal with specific insurance providers and have negotiated this discount on behalf of the borrowers.

You can use our First Home Owners Grant Calculator to find out an estimate of the government benefits you may be eligible for. This calculator can be used to know which grants and stamp duty exemptions you may qualify for.

The results are based on the assumptions that you meet some standard first home buyer criteria and you are signing the contract of sale today. If you buy the house in the future then the benefits may differ.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Simon_Baker
Posts: 37
Joined: Mon Jul 15, 2013 1:09 pm

Re: What fees should I pay for while buying a house?

Post by Simon_Baker »

You have shared some great info. Thanks for these. Will definitely try out the calculator.

Post Reply