Buying or selling a new house is always a very lengthy and tedious process and there are various costs that you will grapple with, either as a buyer or a seller, beyond the actual purchase price of the property.
Property Purchase Tax
This refers to the tax that is levied on the purchase price. It is generally calculated as a percentage of the property purchase inspection price. The formula for calculating this tax may however vary from state to state.
The adjustment costs are the various prepaid costs made by the vendor that you will have to reimburse upon taking possession of the property. Adjustment costs can include gas charges, hydro charges, property taxes as well as prepaid water taxes. Others include the property inspections melbourne service costs, the lawn care costs and so on.
There are banks that still levy mortgage fees when you apply for mortgage. The fee may also cover the costs associated with the mortgage-related property appraisals. This is one of the considerations that you can use to qualify a suitable lender since many banks no longer charge these fees.
This is generally mandatory for all kinds of loans if you will be borrowing at least 80% of the property purchase price. In Australia, it is called the Lenders Mortgage Insurance (LMI) and is levied to protect the lender in case you default on the loan.
If you will be applying for your mortgage through an intermediary or a broker, then you will pay a finder’s fee for the facilitation service rendered. You pay the broker or the intermediary for helping you discover the mortgage package you will be applying for. The finder’s fee is not always a buyer’s responsibility. In some instances, it is paid by the seller.
You have to buy a home insurance for all mortgage packages to protect your investment against any future eventualities such as property damage or fire accidents. The cost of home insurance may vary widely depending on the type of coverage you have picked. Before you pick a particular home insurance, make sure you take the time to shop around for the best deals in the market.
It would be foolhardy to go into a property purchase agreement without legal assistance. You must account for the legal fees you will pay for legal help throughout the transaction process. This may be billed hourly or as a percentage of the purchase price.
The property sellers will be required to pay a commission to the realtor helping close the deal. These commissions are calculated as a percentage of the property purchase price. It can be as high as 5% of the purchase or sales price but you can always negotiate a better rate.
Sellers will also need lawyers and will have to pay legal fees charged for the service. The legal fees can be charged hourly or can be a percentage of the transaction cost.
Mortgage Discharge Fees
These are applicable for sellers that have closed mortgages and are planning to sell their properties before the maturity of their mortgages. In this case, you will have to grapple with the discharge fees and various penalties that might amount to a few months of mortgage payments.