The cost of buying a new home in any city or town can be substantial, as real estate rates are going through the roof these days. Under these circumstances, purchasing houses for sale can be a very lucrative option, as people can own a home at the desired location and by paying less cost than the prevailing market rates. However, to buy such a property, some early research may be needed so that the costs and other requirements may be known suitably. After selecting a property at a suitable location, getting an idea of the costs is very important, as most other factors can be managed later on.
It can be a good idea to get some informed advice from professionals like accountant, lender or financial advisor. They will help you understand all the expenditure clearly. To get an understanding, the full cost involved in buying a house for sale is discussed here.
Making a deposit – To secure a decent home loan for buying houses for sale, a buyer may need to make 10 to 20 percent deposit upfront. It can be up to 20 percent if a buyer wants to eliminate paying the Lender’s Mortgage Insurance (LMI). However, there are low deposit home loans too that are available in the market, but the mortgage insurance requirement in most of them can be quite high along with many other needs.
Conveyancing and legal fees – Conveyancing and legal fees can make up for a substantial sum of money, and therefore it is important to plan for them at an earlier stage. With some homes, these fees can be quite high, whereas for others it may not be much. Hence, depending on the kind of legal work that may be needed for a property, this cost may vary, and setting aside AUD 1,000 to AUD 3,000 can be enough for the same.
Stamp duty must be paid – While buying houses for sale, the stamp duty has to be paid to validate a transaction. Moreover, the stamp duty may vary on the purchase price of a property, and it will also depend on the state where the house is being bought. For a rough quotation, one can always take the help of online stamp duty calculators that can be accessed on many real estate sites. They can help in providing a rough estimate of the amount that may have to be paid by a buyer as the stamp duty for buying a property.
Insurance and financial costs – In case a buyer plans to borrow 80 percent or more of the purchase price, then LMI will have to be paid for it. This would cover the lender in case of non-repayment. In addition to that, there will also be applications, settlements, and valuations involved in buying houses for sale. In case a bank does not waive off its fee, it can cost AUD400 to AUD500, whereas a mortgage application can be in the price range of AUD200 to AUD600. However, this largely depends on the lender’s conditions.
Pest and building inspection – It is important to ensure that adequate pest and building inspection is carried out while buying houses for sale. This aspect should not be avoided at any cost, as later damages without covering them can be quite substantial. About AUD500 to AUD700 may be needed for the purpose, but owners can get ample peace of mind after the process, as the property will be certified for being pest-free and having a robust structure.
In addition to all these costs, moving costs, home insurance, mortgage repayments, and protection insurance, repairs and maintenance, and council fees may also have to be paid. Therefore, it can be a prudent decision to have AUD 5,000 to AUD 10,000 ready at all times so that emergency repairs can be covered.
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