Additional Costs Attached With Property Purchase
Andrew Mirams writes a piece for the website Property Update where he talks about the extra costs associated with a property purchase. Your upfront deposit, after all, is not the only payment you are going to make.
Additional expenses involved with buying a home
There is a list of expenses which come with it. Below is a bullet list of points Mirams makes.
You will have to:
- Budget for the home loan application fee and cost of mortgage establishment.
- Pay registration fee for the property to the government.
- Pay for a property valuation.
- Pay for the lenders mortgage insurance in cases when the upfront is less than 20% of the purchase price of the property.
- Pay for the pest and building inspection (domain of the conveyancer).
- Pay for the Stamp Duty (cost may differ from state to state) and title registration.
- Pay fee to the solicitor or the conveyancer for getting the title deed legally passed on to you. This is referred as the legal transfer of ownership.
- Pay for getting the home and its contents insured. In addition, you may also need a liability insurance.
- Pay for the mortgage repayment cover which insures you against bad days ahead; this is keeping in mind that you may fall sick or get injured thereby failing to earn temporarily, subsequently failing in your mortgage commitments.
- Pay for the costs incurred after moving in. These may include, but are not limited to, body corporate fee, council rates, ongoing maintenance and costs of moving.
You can read the original article here.
Factor in all costs for a true evaluation of profit
The article neatly cites all the additionally costs which buyers will do well to budget for. There is an apparent cost of buying a home and a true cost of purchasing one. Unless you factor in all these extra expenses you will never be able to figure out the 1) capital growth in case you retain your home for 5 to 10 years or 2) profit margin if you renovate and sell it in months to come.