First Home Buyer's Guide

Purchase costs explained

Cost vary depending on the type of property and whether it’s new, exiting or you are building it.

 

Lender’s Mortgage Insurance

An insurance policy which protects the lender from your default (not you). This figure is a once-off premium payable up front and in most cases can be added on top of your loan (up to a maximum level - typically 95% of 97% loan-to-value ratio). 

 

Stamp Duty

This is the transfer duty payable to the state or territory you are buying in. Unless you are eligible for an exemption this is often the largest purchase cost.

 

Exemptions are available in most states for new property or vacant land and some states also offer exemptions

 

Legal representation

Unless you’re a lawyer yourself (and often even then) a solicitor or conveyancer is best to use to represent you in the transaction. The solicitor or conveyancer will assist you to negotiate terms in the contract and assist in affecting the settlement for you.

 

Which is best for you is a contentious issue, but usually a conveyancer is cheaper however only a solicitor is qualified to help you should things to really wrong.

 

Property inspections & enquiries

This is completely Property dependent. The usual searches include:

 

Pest & Building

This is critically important to ensure that the building is structural sound and that termites haven’t eaten away at the frame.

 

Strata searches

Searched uncover whether the have been any building issues identified and whether these is sufficient funds in the sinking fund in order to cover future repairs and maintenance.

 

Electrical or plumbing Inspection

These may be needed in rare cases where issues are identified by the pest and building.

 

Planning approvals

You may also see the need to ascertain whether improvements and add-ons are in fact council approved. The last thing you want is to find out that you have to tear down the carport because your predecessors never obtained council authority.

 

Lender fees

Lenders typically charge an application fee or annual fee (payable up front). They may also pass on their legal and valuation expenses to you.

 

Government charges

Registration of mortgage and title transfer fees typically apply. Usually in the hundreds of dollars.

 

Pro tip: new home typically have lower purchase costs and attract government grants.

  • Grey Facebook Icon
  • Grey LinkedIn Icon

© 2018 Parker Lane. 

Parker Lane is a trading name of Upside Downside Pty Ltd. Australian Credit License Number 482276

The information contained in this website may not be current or complete, or may not remain current or complete, and therefore under no circumstances should be relied upon. No warranty or representations as to its accuracy or completeness is provided. We are not liable to your or any other person for loss, damage or injury arising from the use of, or reliance on, this information, including but not limited to loss suffered in connection with incorrect or out of date information. It is not intended to be a substitute for professional financial advice and does not purport to guarantee any projected amount of borrowings. All applications for credit are subject to normal credit approval criteria. Parker Lane specifically disclaims any responsibility or liability for any losses or damages arising from any use of or reliance upon any calculations or conclusions reached using this website. See our credit guide for further details.