The Hidden Costs of Buying Real Estate in Lethbridge

1. THEHIDDENCOSTSOFBUYING THEHIDDENCOSTSOFBUYING REALESTATEINLETHBRIDGE REALESTATEINLETHBRIDGE Thinking of buying real estate in Lethbridge to turn into your forever home away from the city or as an investment property? Don’t forget to factor in all the hidden expenses of purchasing a property before you sign those papers! A common mistake made by many first-time homebuyers is focusing only on the deposit when buying a house. While it is true that your deposit will be the largest amount you’ll pay out of pocket, there are several other payments you’ll have to make, which can significantly blow your budgets out of proportion. This is one of the reasons why it is always advised to buy a house that is worth a little less than the loan you have qualified for: to leave you with enough money after submitting your deposit to take care of all of these extra costs. GOVERNMENTCOSTS GOVERNMENTCOSTS Stamp duty: This is a type of tax paid to the government on certain documents and transactions, and is likely to be the biggest upfront cost you have to pay after your deposit. The value of this tax differs from state to state and is bound to increase the higher up the market the property is, but you can expect to pay tens of thousands of dollars as stamp duty. Fortunately, Victoria offers concessions to first-time homebuyers or to people buying property in regional Victoria and will even waive stamp duty if the property you’re buying is worth less than $500,000. Property transfer fee: When a property deed changes hands, a fee typically applies. This fee covers the costs of transferring the property to your ownership and is typically calculated on a sliding scale in Victoria. This can vary from a few hundred dollars to a few thousand dollars, depending upon the property value. Mortgage registration fee: This is a formal registration of your mortgage, and is a fixed rate of $119.70 in Victoria. LOANAPPLICATIONCOSTS LOANAPPLICATIONCOSTS Mortgage insurance: If you are paying less than 20% of the price of the property as a deposit, you will also need to buy mortgage insurance, commonly known as Lenders Mortgage Insurance (LMI). This sum protects the lenders in the event that you’re unable to pay back your loan, and can be added to your loan or paid as a one-off sum. Loan application fee: This is the fee you will pay to a bank or lender to cover the costs of processing your loan and other administration costs. While these costs typically start at around $150, you may be able to get it waived by speaking to your lender. Lender’s property valuation: Before formally signing off on a loan, your lender will typically conduct their own property valuation to ensure the property is actually worth what it’s being sold for. This cost is also typically borne by the buyer and can amount to several hundred dollars. Ongoing loan fees: Some lenders may charge around $10-15 extra per month for the processing and administration costs of servicing your loan. LEGALCOSTS LEGALCOSTS Solicitor/Conveyancer: When buying a property, it is important to engage a conveyancer or solicitor because of all the legal technicalities involved. A solicitor or conveyancer will ensure all your rights are provided to you, will go over all contracts, ensure everything is in order and prepare all documents involved in the purchase of a house. This cost can typically start from $1500, but depending upon the complexity of the purchase, could be significantly more. PESTANDBUILDINGINSPECTIONS PESTANDBUILDINGINSPECTIONS It is imperative for any homebuyer to get a pest and building inspection conducted to detect any minor or major faults in the house, water damage, presence of termite infestations or other pests before you go ahead with the purchase. This is an extremely useful part of the home buying process because it can help you negotiate the costs if major repairs are required, or can prevent you from having to spend tens of thousands of dollars for problems that should have been fixed by the seller. Pest and building inspections can cost up to $1000, but it is an amount that offers any homebuyer peace of mind that they’re investing in a structurally sound property. STRATAANDCOUNCILFEES STRATAANDCOUNCILFEES Every council in Victoria collects fees from residents and businesses in its jurisdiction to take care of the upkeep of public areas in the municipality. This is typically an ongoing cost and may be charged on a monthly, quarterly or annual basis. Buying real estate in Lethbridge or anywhere in Victoria can be difficult, but the security and sense of ownership it offers is unparalleled. Moreover, first-time homebuyers can benefit from several concessions and grants offered by the government to make it easier for them to take a step towards property ownership. Source: https://www.stockdaleleggo.com.au/lethbridge