Buying a house is an exciting time. In some cases, it may be the first home you have ever purchased. Owning a house comes with benefits such as:
- You can build your Financial Wealth
- Guaranteed living security
- You can build equity
- A house is a solid investment
- And more
Unfortunately, the process can also seem daunting and complicated, especially if this is your first time purchasing a property. When buying a house, many costs come into play – from stamp duty to rates and insurance; there’s no shortage of expenses!
This post will look at how much it costs to buy a house in Melbourne. Read on to find out some of the costs involved.
Stamp Duty
Stamp duty is a government tax on the purchase of a property and it does not apply to leases (renting). Before you sign legal paperwork, find out how much stamp duty will be payable by either purchasing an up-to-date edition of a residential land rate or contacting your solicitor for advice.
The stamp duty calculation for purchases in Melbourne depends on the purchase price of a property, whether you are an Australian citizen or not and if it’s your first home country (in which case there will be no stamp duty payable).
Title Transfer Fees When
When you buy a property in Melbourne, some costs will fall to the buyer. One of these is title transfer fees which can vary depending on your real estate agent or lawyer and whether they charge by time spent or hours worked.
According to one study, these fees range from 150AUD up to 700AUD. But, don’t be alarmed if they’re more than this as it could just mean that your solicitor has chosen not to return calls when enquiring about them!
The amount for Title Transfer Fees depends on who does them and how much work needs doing, so it’s best to ask around beforehand what the average cost will be before proceeding with any legal agreements.
Registration Fees
Registration fees are a one-time fee that covers things like council rates – which vary depending on where you live – as well as other expenses such as stamp duty and more specific taxes like land tax if applicable in your state/territory or municipality.
Registration fees usually have to be paid upfront, but there’s not much need for concern about them being an additional settlement cost. The total price of your property will remain unchanged without registration fees, so make sure you factor this into your plans before deciding upon a purchase.
Lender Fees
Registration fees are one of the loan costs that your lender will determine. Some lenders, such as Quicken Loans and Close Brothers Mortgage, offer registration fee payment plans to help make it more affordable for first-time homebuyers with low credit scores or a history of late payments on other loans.
If you have already started shopping around for mortgage rates to purchase a new home, now is the time when your total cost should become clear. For example, if going through Loan Advisor requires an upfront registration fee of $300 while working with Guaranteed Rate might incur no initial charges, would you go ahead and start gathering free quotes? What about monthly maintenance fees? Would they better suit your budget every month than the one-time fee?
The costs of registering your loan and getting a mortgage could come in many different forms depending on which lenders you work with. By looking at all the fees involved before signing any paperwork, it can be easier to make an informed decision about what is best for you.
Some lender fees (registration fees) will depend on who you choose as your lender. Some offer payment plans so first-time home buyers might find them more affordable – whereas others may not have registration or monthly maintenance fees at all!
Mortgage Registration Fees
Every time you buy a home, it is necessary to register the mortgage with the land registry office in your area. The costs for this are minimal, and many lenders in advance can pay them without any penalty or additional cost. These fees usually range between 70-150AUD depending on where you live (and other factors).
Some mortgages may not offer these services as part of their package, so make sure to check before taking out a mortgage that doesn’t include them. Smaller banks and credit unions offer them, which means they don’t operate all over the country.
Inspection Fees
There are many reasons that lenders want to catch any potential issues with the property before they give you a loan. If there’s anything wrong, it could cost them money. So, to make sure everything is up-to-date and in good condition, lenders charge an inspection fee after pre approval for your home purchase.
The lender wants to know what kind of shape the house is in so they can decide whether they should lend money on it or not. The higher risk the house poses for lending companies, the more inspections will be required, and thus higher fees charged by them out of pocket and mortgage points paid at closing time (this varies depending upon how high-interest rates are).
Lenders may charge an inspection fee if you are refinancing or obtaining a second mortgage from them. This would usually only happen in cases where a significantly higher amount is owed than on the first loan.
Home Insurance
Home insurance is the one type of insurance with more in common with life and auto than it does with other property-related coverages. In many cases, you are paying an annual premium for peace of mind — not to replace your home if it burns down or gets hit by lightning. But while homeowners’ policies have been steadily declining in importance, they still have a place in most homeowners’ lives.
The cost of buying a home in Melbourne is hard to wrap your head around. There’s stamp duty, legal fees, bank charges, and so much more. It would help if you were realistic about what you can afford before offering any property because there are so many other factors in play.
Given that it is such a large purchase, you need to consider all of the costs associated with buying a home when making your offer on any property. You don’t want to be surprised by hidden costs or end up paying more than you can afford for the house because there were unforeseen expenses involved.
