RateCity
Cost Of Buying A Property
The cost of buying a property is a huge financial burden that cannot be avoided if you need a home loan. If you are trying to work out the cost of buying a property, the general cost is at least 15 percent of the purchase price. Here is a guide of the costs involved:
- Deposit a?? whether you are a first home buyer or are planning to refinance, you should plan to save at least 10 percent of the purchase price for your deposit. This is because the majority of home loans will not allow for less than a 10 percent deposit so it will make it easier for you to have your application approved and you will have more choice and hence a better deal.
- Application fees and upfront costs a?? most lenders will charge you a fee to process a home loan application and there are also other cost of buying a property including legal fees and valuation fees.
- Lenders mortgage insurance a?? if you are planning to borrow more than 80 percent of the purchase price, you will be charged lenders mortgage insurance to cover the lender from you defaulting on the loan.
- Stamp duty a?? this is a tax that you must pay when purchasing a property. It varies in each state and there are government incentives for first home buyers and for newly built properties so check your State Government's website for more details.
- Repayments a?? lenders will charge you interest on the money you borrow and most loans offer repayments fortnightly or monthly. Some loans charge a monthly service fee so shop around to find the best rates and fees online.
