What are the costs involved in buying a home?

One of the biggest purchases you will ever make is your home. While saving for a deposit is one of the biggest cost considerations, it is not the only costs associated with buying a house. There are upfront costs that need to be taken into consideration, to ensure you as a buyer are not blindsided by any surprise or hidden costs that may need to be covered.

Buying a property to live in Fairy Meadow or looking in the best suburbs of Wollongong with confidence is easy when you have all the information. In this video, we provide you with a guide on the upfront and hidden costs involved in buying a home in NSW to ensure that you have all basis covered.

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The biggest cost by far, is of course, the purchase price. After agreeing on a purchase price with the seller, other costs to buy a home include:

1. Stamp Duty

Stamp duty is a tax that must be paid when purchasing a property. It is calculated on the purchase price of the property. The amount of stamp duty depends on the location of the property, the price of the home, and if it is an owner occupier and investment purchase. Due to these many factors, it is worthwhile making use of an online stamp duty calculator to ascertain the stamp duty cost for your purchase. First Home Buyers may qualify for stamp duty exemption in some cases.

Some lenders will prefer you to pay for stamp duty, but in many cases, you can include this in your overall loan amount. Speak with your lender or broker about what is associated with having this cost as a part of your loan.

2. Legal and Conveyancing Fees

We recommend using a licensed conveyancer to check your contract, ensure your property transfer goes smoothly and your legal documents are correct and compliant. Your conveyancer will conduct the required searches of property title records for settlement, and arrange for other searches such as council or water rates, roads, land tax searches, and heritage listings. Conveyancing fees in NSW when buying can vary from $500 - $3,000.

3. Inspection Fees

When purchasing a property, you will be advised to obtain a pest and building report. This cost could save you thousands in the future, especially if you find out that your pest and building report is not perfect. If you are purchasing a strata titled property, you should look to purchase a strata report to gain a full understanding of the building and its history. Inspection fees can vary from $200 - $600.

4. Removalists Fees

Physically moving into your new home is a big job! Having a removalist do this for you can be a huge saving of time and stress. Removalists costs can vary from $550–$3500.

5. Lenders Mortgage Insurance

Lenders Mortgage Insurance, or LMI, is a one–off payment charged by your lender, usually between 1–3% of your loan amount, if you are borrowing a high amount compared to the property value. You can avoid this additional cost if you have a deposit of more than 20%, plus stamp duty, or if you have a guarantor.

6. Title transfer fee

This is a government fee charged to transfer ownership of the home from one person to another, and attracts a cost of approximately $150. It can also be called a property deed transfer by Wollongong conveyancers.

7. Mortgage registration fee

This is another government fee which registers the security for a home (ie) it registers the physical property as security for your loan, and attracts a fee of approximately $150. It is important as it allows future buyers to check any claims that may exist on a property.

When you have found your dream home, unfortunately the costs associated don’t stop at settlement date. Some ongoing costs to consider include insurance, strata fees and/or council rates, renovations, utilities such as electricity, gas, internet, and water.

By making sure you are aware of both the upfront and hidden costs involved in buying a home, you can approach your property purchase with confidence and minimise any surprises. To ensure you remain on top of your property search, keep an eye on properties for sale, as we are continually adding new stock to our list.

If you are looking for a property to buy, request to be added to our open home alert 

YES, ADD ME TO YOUR OPEN HOME ALERT

We hope that has helped you today. If you have any questions, we would love to talk to you and can be contacted on 0426 264 771. We hope you and your loved ones remain safe and healthy. Most importantly we are here to help.