The extra costs of buying a home

Home loan application fees

Most lenders charge a home loan application fee. The fee will depend on the loan you are applying for and the lender. 

Home loan application fees cover:

• loan contracts 

• property title checks

• credit checks

• attending a settlement.

Mortgage fees and costs 

• Mortgage establishment fees – lenders generally charge a mortgage establishment fee, which is a fee for setting up a mortgage.

• Property valuation fee – a third party chosen by the lender, is appointed to determine the value of your land and improvements.

• Mortgage registration – your mortgage deed needs to be registered with the government. Some State Governments charge stamp duty to register your mortgage.

• Lenders Mortgage Insurance – if you don’t have 20% of the purchase price or the value of the property, the lender will require you to pay for a lenders mortgage insurance policy that covers their risk in the event you default on your repayments.

Property fees and costs

• Building, pest and electrical inspection fees – it’s wise to have your property inspected for any structural or electrical problems and for pests. 

• Registration of transfer fee – the new owner of the property needs to be registered at the land titles office.

• Legal fees – you generally need to pay a solicitor or settlement agent to handle the transfer of ownership of the property on your behalf.

• Home and contents insurance – most homeowners insure their home and contents against a range of threats, such as burglary, fire, storm, etc. Lenders insist that your property is insured while you have a mortgage.

• Life and income protection insurance – borrowers should consider protecting their incomes and themselves while they have a mortgage.

• Utility costs – connecting electricity, gas and telephone can attract a fee.

• Council rates – your local council charges rates to cover garbage collection and a host of other services.

• Water rates – the water corporation charges rates for the supply and upkeep of water to your property.

• Strata / body corporate fees – if you buy an apartment or strata titled property, body corporate fees are charged, and some fees can be significant, particularly if the building is in need of a major work, or if there are lifts, pools and other communal facilities.

• Maintenance costs – don’t forget to make provision for regular maintenance on your home, even if you decide not to undertake significant renovation.