Hidden Costs Attached to Purchasing a Home
There are costs other than the cost of property when it comes to the buying bit. Having the savings deposit with you may be 20% of the battle won but a lot still remains to be contested. For a start, how about the Lenders Mortgage Insurance you pay for the property to insure the lender against default and what about the Stamp Duty, which anyway is quite steep and way above the global average in our country.
Think about the conveyancer’s fee. Here is a professional who will get your title deed evaluated, your physical property inspected and the sale of contract prepared. He will stick with you till you are handed over the keys. Of course, the service comes at a cost which you must add to the list of total buying cost.
Hidden costs aplenty
The loan application and establishment fee can itself run up to a better part of $600. Add to this, council and water rates and bank’s valuation fee and you have a cumulative figure close to $1,700. In fact, for a property worth $500,000 if you need to fork out a rather modest $50,000 as deposit, you need to push nothing less than $12,000 as hidden costs.
Investors are always better prepared
Unless you factor these in your eventual budget you will never be too well prepared for the purchase. This is one area where the investors come up trumps, owner-occupiers pass with average results and first home buyers almost collapse.
A seasoned buyer’s agent can make the right recommendations and steer you towards a cost-effective purchase, ruling out quite a few hidden costs. If you are planning to buy a place for yourself, you can get in touch with me. I will be only too glad to assist.