Wouldn't it be nice if the only amount of money you needed to outlay when purchasing a home was the actual cost of the house.
Unfortunately, this isn't the case so let me break down some extra costs associated with purchasing a home in Queensland.
1. Solicitor/Conveyancer Fees
When you purchase a property you will need to engage a Solicitor/Conveyancer.
The cost can vary depending on who you choose and what their inclusions are however, approximate costs are between $800-$1,300.
Approx. $800 - $1,300
2. Pest and Building Inspection
You will likely want to do a pest and building inspection when purchasing.
Inspection costs typically range between $400 - $800 depending on who you choose and the size of the property.
Approx. $400 - $800
3. Stamp Duty
Stamp duty is calculated based on the house cost so this cost can vary. If you're a first home buyer in QLD, there is a transfer/stamp duty concession for eligible first buyers purchasing a home valued at less than $550k.
Stamp duty is waived on homes worth less than $500k, while concessional rates apply to those valued $500-550k.
Use the free stamp duty calculator here
4. Property Management Fees
If you're purchasing a home as an Investor you will have additional costs associated with the management of your property.
It's good to know what approximate costs of the fees etc. will be prior to purchasing the property so you can prepare.
Every agency will have different costs so reach out to a few and get some quotes.
5. Repairs
Unless you're buying a home you had the intention of renovating it's easy to forget that you will likely need to do a few minor repairs within the first year.
It's a good idea to have a little bit of money aside just in case repairs are required.
Approx. $1,000
6. Body Corp
If you are purchasing a property under a Body Corp or Strata Title, there will be additional fees associated which vary from complex to complex.
Approx. - $1,500 - $3,500 annually.
7. Mortgage Registration Fee
This is payable at settlement so the lending institution can register their mortgage over the property – it is currently set at $208.83 in Queensland.
Cost $208.83
8. Deposit
Your deposit will vary depending on your affordability, the house purchase price and if you're eligible for any grants or schemes currently available.
On a $550,000 property a 5% deposit would be approx. $27,500.
9. LMI
LMI stands for lenders mortgage insurance and is insurance that a lender takes out to insure itself against the risk of not recovering the outstanding loan balance if you, the borrower, are unable to meet your loan payments and the property is sold for less than the outstanding loan balance.
By paying LMI if you do not have a substantial deposit (usually 20%), it can be difficult to find a lender who will lend to you. If you are in this situation, LMI helps make it easier for you to obtain mortgage finance. LMI does this by reducing the risk of loss to the lender if you stop paying your loan repayments. Because LMI reduces the risk for the lender, it makes them more likely to lend to you even though you do not have a substantial deposit at the outset.
Use this handy LMI calculator.
HOT TIP: Reach out to a broker or bank so they can help you with an accurate calculation of how much savings you will require and what grants or schemes you may be eligible for.