Application & establishment fees, stamp duty + more.

When taking out a mortgage, many people forget to consider the associated fees and expenses. Here are some of the extra costs that you’ll need to consider when you take out a home loan, however we have ways to allow for these costs by providing estimates, and even minimising these costs in some instances too!

Home loan application fees
Most lenders charge a home loan application fee. This can range from loan to loan, and covers:

• Loan contracts 
• Property title checks
• Credit checks
• Attending a settlement

Mortgage fees and costs

• Mortgage establishment fees – Lenders generally charge a mortgage establishment fee – a fee for setting up a mortgage.
• Property valuation – A third party chosen by the lender, is appointed to determine the value of your land and improvements.
• Mortgage registration – Your Mortgage deed needs to be registered with the government.
• Mortgage stamp duty – Some State Governments charges stamp duty to register your mortgage.
• Lenders mortgage insurance – If you don’t have 20% of the purchase price or the value of the property, the lender will require you to pay for a lenders mortgage insurance policy that covers their risk in the event you default on your repayments.

Property Fees and costs

• Building, Pest and Electrical Inspection fees – It’s wise to have your property inspected for any structural or electrical problems and for pests (e.g. termites).
• Stamp duty – Governments charge Stamp Duty to transfer the ownership of a property.
• Registration of transfer fee – The new owner of the property needs to be registered at the Land Titles Office.
• Legal fees – You generally need to pay a Solicitor of Settlement Agent to handle the transfer of ownership of the property on your behalf
• Home & contents insurance – Most homeowners insure their home and contents against a range of threats: burglary, fire, storm, etc. Lenders insist that your property is insured while you have a mortgage.
• Life and income protection insurance – Borrowers should consider protecting their incomes and themselves while they have a mortgage.
• Utility costs – Connecting electricity, gas and telephone can attract a fee.
• Council Rates – Your local council charges rates to cover garbage collection and a host of other services.
• Water Rates – The water corporation charges rates for the supply and upkeep of water to your property.
• Body corporate fees – If you buy an apartment or Strata Titled property, body corporate fees are charged, and some fees can be significant – particularly if the building is in need of a major work (e.g. concrete cancer, security upgrade, new hot water system, etc) or if there are lifts, pools and other communal facilities.
• Maintenance costs – Don’t forget to make provision for regular maintenance on your home – even if you decide not to undertake significant renovation.

To learn more about the hidden costs of buying a home, talk to us!

Feel free to reach out and book a meeting!

It’s been quite a year, hasn’t it? After last month’s decision, the Reserve Bank of Australia has chosen to take stock of what has been a turbulent year and has included three cuts to the official interest rate, which now sits at an all-time low of 0.10%.
 
The RBA – and mortgage holders – will be buoyed by a predicted 7% rise in house prices next year (according to a Commonwealth Bank Report). November has seen record-low interest rates, a resurgent labour market, which has added 650,000 jobs in five months, and $394 billion in state and federal government stimulus. All of this is expected to move Australia out of a technical recession when official September quarter figures are announced tomorrow (Wednesday 2 December).

According to data from research firm Digital Finance Analytics (DFA), this positive forecast is set to create a wave of homeowners looking to change their living arrangements in 2021. DFA’s data suggests that over 1.1 million Australians intend to sell their property in the next six months.

Overall, 2021 is shaping up to be a transformative year for the Australian economy – and the housing market. So, what does this mean for you?
 
If you’re considering a move, 2021 will be ideal. Of course, you’ll need to consider whether you’re upsizing or downsizing. Either way, the cost of borrowing will more than likely be to your benefit.
 
If you’re happy where you are, you should still consider reviewing your mortgage. There’s a good chance you can either find a better deal or renegotiate your current loan.
 
Whatever your plans are, we are here to help. Please feel free to contact us to discuss how we can help you in 2021.