The Upfront Costs of Buying Property

Found a property - tick!

Home loan approved - tick!

Ready to lock down a 25 or 30 year mortgage?

Just make sure you’ve taken into account these upfront costs of buying your next property.

1. Building and Pest Inspection

Before you take the plunge, investment in a pest and building inspection could be one of the best investments you can make. A typical pre-purchase building inspection could cost somewhere between $300 - $700 (depending on the size of the home) and a pest inspection between $200 - $300. More recently these reports are being bundled together in a more cost effective option. This small investment upfront could save you in the long run if you need to pay for expensive termite repairs or water issues.

2. Loan Application Fees

Did you know that some lenders may charge you a fee simply for the privilege of applying for your loan. Talk to your bank or broker to see if this can be waived.

3. Lenders Mortgage Insurance

If you have less than 20% deposit for your upcoming purchase, you could be up for Lenders Mortgage Insurance. This can add thousands of dollars to the cost of your loan so make sure you have all the details.

4. Legal Representation Fees

To avoid costly mistakes, you should engage a Solicitor or a Conveyancer to assist you with the legal aspects of your purchase. This will include the review of the contract of sale, mortgage documentations, payment of stamp duties, exchanging contracts, calculating adjustments for Council and water rates to name a few.

5. Government Stamp Duty

Stamp Duty on a property purchase is a compulsory state government tax and can add thousands upon thousands to your purchase. For more details, use realestate.com.au's online calculator

6. Home and Contents Insurance

A vital element to have in place for settlement (or even just before). The costs of home and contents insurance will vary from provider to provider, so make sure you do your research and work out what the best option is for you.

7. Moving Costs

Depending on how far you are moving (and how much stuff you have to move) removalist fees can also add a few thousand dollars to your upfront costs when buying a home. There are so many providers in the marketplace, make sure you ask people you know and trust for recommendations.

8. Connection Costs

Whilst not substantial in the scheme of some of the above costs, connecting your various utilities can temporarily impact your cash flow. Again, many providers make for a competitive market so do you research to get the best option for your situation.

9. Renovations

It’s not often that we buy a home that’s 100% perfect (congratulations if you have!) for us the moment we take possession. There may be some things you really want to do before you move in (like fresh paint, update the carpet or flooring or even more substantial upgrades such as bathrooms or kitchens). If this is something you had in mind, consider getting yourself some indicative estimates ahead of time to ensure you know what to expect and can budget accordingly.