Other mortgage costs:
In addition to LMI and stamp duty, there’s a range of smaller costs that will add to your bottom line when buying a house. While some won’t be applicable to your circumstances, it’s worth checking off each one:
Conveyancing / legal fees: While there are some DIY conveyancing kits on the market it’s a good idea to consider engaging a professional when it comes to managing legal documents. There are two types of professionals you can engage: a conveyancer or a solicitor. A conveyancer is likely to be cheaper however they are more restricted in the advice they can give you.
Mortgage fees: there are a variety of upfront fees your lender might charge you at the start of your loan including application fees, documentation preparation fees and bank valuation fees. Check with your lender what the total upfront fees are before you lock yourself in.
Inspections: There are a range of inspections you will want to consider before buying a property including a building inspection, a pest inspection and a strata report, if you are buying an apartment. These reports will help you determine whether there are any current or previous issues with the place you want to buy – information you’ll want to know before you secure the keys to your new home, rather than after.
Council, water and strata rates: if the previous owner paid for these services a year in advance, you’ll be asked to refund them for the remainder of the year.
Home Insurance: insurance is vital if you want to protect your new purchase. If you are moving into the place, home and contents insurance could be worthwhile, while investors who are renting the property will probably want to opt for landlord insurance.
Moving costs: If you’re planning on moving into your new home, you might need a removalist. Professional removalists can be expensive, particularly if you have a large house or you are moving interstate. If you want a low cost alternative, online service forums such as airtasker.com can help you nab a competitive deal.
Telecommunications: the relocation of phone lines, internet and any Pay-TV services can add up so make sure you factor in a few hundred dollars for this. These companies can also be booked for months in advance so it’s a good idea to call them early.
Rental costs: If you’re an investor you won’t be looking for a removalist but you might need a real estate agent to find tenants and manage the property, if there aren’t tenants already in the place. If that’s the case, don’t bank on receiving the first couple of months’ rent. It will take you time to find the right tenant and then the agents fees can take up much of the remainder.