When you purchase a house and land package there are numerous ongoing costs involved, over and above your home loan repayments.
To give you an idea of these costs, so you can include them in your budget, here is a quick overview of what you can expect.
Do you need insurance?
There are three main types of insurance you will come across, when buying your first West Australian or Sunshine Coast house and land.
Here is a brief overview:
1. Lender’s Mortgage Insurance (LMI)
LMI is a type of insurance that most lenders require unless you can put down a deposit of 20% or more. It varies according to the size of the loan and protects the lender from you defaulting on your payments. It is usually charged as a one off premium and calculated on a sliding scale. So if you have more than a 20% deposit for your Perth, Brisbane or Sunshine Coast house and land package, then you do not need this insurance.
2. Mortgage Protection Insurance (MPI)
MPI is a type of insurance you take out to cover your home loan. This is not mandatory, but it is a very good idea to have this type of insurance. It takes care of some or all your mortgage payments if you become injured or too ill to = work. Costs will vary according to the extent of the cover you want.
3. Home and Contents Insurance
This insurance covers your new home and the belongings you keep inside it. It covers your property from physical damage, such as fire, flood or loss caused by burglary. Your lenders will require your property to be protected, because they have a vested interest in it and without house insurance, if your home burns down, you will be left with a big mortgage and no home.
What are the costs to consider when owning a home?
Before you apply for a home loan for your Brisbane or West Australia house and land, you need to figure out how much you can afford to pay each month. The ‘real’ amount you can afford in repayments is affected by your lifestyle and other commitments, such as other loans you may have.
It will also be affected by the ongoing costs involved in owning your own home, such as:
- Land and water rates
- Electricity and gas
- Strata charges
- General maintenance
For an accurate estimate of these figures, you will need to create a budget. This will show what your expenses (outgoings) currently are, and how much you have left over from your income.
Other costs to factor in are purchasing costs to do with purchasing Queensland or West Australian house and land packages, such as stamp duty, pest and building reports, and possibly a strata search (usually if you’re buying an apartment). Don’t forget conveyancing costs (the legal fees), loan application fees and insurances.
It is a good idea to meet with your broker or lender early on in the process, so you know what costs to expect and can budget accordingly.
Home loan fees and charges
Home loan fees and charges can vary significantly from lender to lender and to help you assess your budget we have listed a few of the fees and charges you will need to consider. Your mortgage broker can confirm which fees will be applicable to you and help you budget for these, in addition to the repayments of the loan for your Perth or Brisbane house and land.
Setup application fee: Also called an establishment fee, this is charged by the lender to cover the initial costs of processing your home
loan application for your house and land package in West Australia or Queensland. They will however, vary considerably between financial institutions, so it is important to discuss these fees with your mortgage broker.
Setup valuation fee: A valuation is an assessment on the market value of a property at any given time. Lenders may order a valuation on
the property you intend to purchase or use as security for your home loan. The cost of valuations may be included in your application fee or there may be an additional charge from the lender. You need to check on this and include it in your budget if necessary.
Exit discharge fee: Sometimes called an exit fee, a discharge fee is payable at the time you discharge the loan for your Perth, Brisbane
or Gold Coast house and land package. This fee covers the administration costs of preparing your loan discharge documents.
Exit penalty interest: Payable on fixed loans for early discharge. When a lender agrees to a fixed term loan, they are relying on the
loan being held for the full term in order to recoup their own costs for funding the loan. Penalty interest may be charged if you break the fixed rate loan early with the cost increasing the earlier you terminate the fixed loan.
Ongoing fees account keeping fees: You may incur account keeping fees for the loan on your Perth or Queensland house and land, which may be added monthly to your home loan account.
Ongoing fees package fees: If you have your loan packaged with other banking products, such as a savings account and credit card facilities, you may be charged an annual fee to cover the costs of the package. Generally if you are paying package fees, you will not be charged account keeping fees.
Account transaction fees: You may be charged a fee for certain account transactions, such as redrawing money from your home loan; these fees are usually based on usage.
Switching fees: A switching fee may be charged if you change from one product to another within the same lender, for example you decide to change from a variable rate to fixed rate home loan. This fee covers the administration costs of the lender.
Other fees and charges when purchasing your house and land
These are fees or costs that are charged by the government when you purchase a new home and other costs that you might need to include in your budget.
Government and statutory charges: As part of purchasing property you may be liable for a number of government and statutory charges, including transfer stamp duty, mortgage stamp duty and mortgage registration fees. Your broker will be able to walk you through these fees.
Stamp duty is charged by the state and territory governments, and the amount will depend on where you buy the property. It will also vary according to the purchase price of your Brisbane or Perth house and land package.
Legal fees: Legal fees relate to the legal processing of your house and land in Queensland or Perth by a qualified conveyancer or solicitor.
There are generally two components to the conveyancing fee charged by a solicitor or licensed conveyancer: a legal fee and a disbursement fee.
Legal fees cover the time and skill of your solicitor or conveyancer, and the disbursement fees cover any costs incurred by your legal representative in conducting enquiries and searches on your behalf. Depending on the number of searches your solicitor conducts, this will likely affect the final cost.
Building and pest inspections: Before committing yourself to purchasing a property, it is smart practice to organise a pest and building
inspection. A building inspection will provide information on any major structural problems or faults, such as water leaks or cracks in the
Similarly a pest inspection will identify any pests, such as termites that are present in the property. You may be able to use these findings to negotiate a lower purchase price, especially if any repairs or treatments are required to fix the problem. A pest and building inspection is not necessary when you purchase one of our Perth or Queensland house and land packages.
Council rates: You will be liable to pay rates on the value of your property to your local Council on whatever portion of the quarter remains after settlement. Your rates generally include sewerage and water costs, as well as a charge against your property to help pay for local infrastructure. Rates will vary widely depending on the area you live in and the value of your property. You will need to check with your Council about your rates.
Perth house and land packages – Sunshine Coast home builders – Queensland builders
To find out more about our house and land packages on the Sunshine Coast or in WA, call us on 1300 904 040 or complete our online enquiry form.