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Whilst you don’t pay a dollar for our service, there are some fees and charges you need to be aware of when purchasing property.
Home loan fees and charges vary from lender to lender but here are some of the common ones. Your broker will take you through the ones relevant to you.
Mortgage broker costs
You don’t pay us a single dollar for our service – because we receive commission from the successful lender.
Loan application fee
Lenders charge an application fee to cover the initial costs of processing your home loan application. Depending on the lender, this fee may cover additional costs such as property valuations.
Setup of lenders mortgage insurance (LMI)
If your deposit is less than 20% you may need to pay LMI. LMI protects the lender from losses that may occur if you are unable to repay the loan. LMI is a one-off fee that can be subtracted from your loan or paid up-front.
A valuation is the market value of a property ordered by the lender as security. Lenders need to understand what they can reasonably expect to recoup if they needed to repossess and sell it. The cost of valuations may be included in your application fee or there may be an additional charge from the lender.
Stamp duty charges are government fees that are paid as part of the property purchase process. Stamp duty varies from state to state and if you are a first home owner you may be eligible for some concessions.
These costs cover the legal processing of your property purchase by your solicitor or conveyancer. There are generally two parts: a legal fee and a disbursement fee.
Legal fees cover the time and skill of your solicitor/conveyancer. Disbursement fees cover the costs of enquiries and searches on your behalf.
Ongoing account fees
Some home loan accounts have monthly account keeping fees.
Exit discharge fee
An exit or discharge fee is payable at the time you close your home loan. This fee covers the administration costs of preparing your loan discharge documents.
Exit penalty interest
You may be charged a fee if you exit a fixed home loan early.
Other Expenses to Consider When Moving Into Your New Home
Organise a building and pest inspection before you sign on the dotted line. A building inspection will identify major structural problems or faults such as water leaks or cracks in walls. A pest inspection will find unwanted guests like termites that might be lurking in your home. You might be able to use these findings to negotiate a lower purchase price, especially if you need any repairs or treatments to fix the problem.
You’ll be liable to pay rates to your local council, including any portion of the quarter remaining after settlement. Your rates generally include sewerage and water costs, and help pay for local infrastructure. Rates will vary widely depending on the area you live in and the value of your property. Check your rates with your local council.
If you buy an apartment or unit, you’ll be liable for strata fees to help maintain shared areas such as the building exterior, gardens and pools.
When you add them all up, it’s surprising how many services you need to disconnect and reconnect when you’re moving. Telephone, electricity, water, gas, subscription TV and internet access are all counted as utilities connections.
Don’t forget to add in moving costs. Depending on how far you’re moving, the costs can add up. Allow for a removalist or hire of truck if you’re doing it yourself, buying boxes and transit insurance.