If you're thinking about buying a home, there's little doubt you're acutely aware of what a big financial undertaking it is to build a strong credit profile and save tens of thousands of dollars or more for your deposit.
However, you have likely also heard all about the "hidden costs" of homeownership and perhaps wondered what they are — and more specifically, what they'll cost you. The following are some of the most common:
First and foremost, you are likely to face a number of different fees associated with getting your home loan initially, Morningstar explained. These include fees for mortgage establishment, transfer, registration, valuation, legal services and more, in addition to stamp duty. The good news is these are mostly one-time costs, but they will likely cost you thousands of dollars.
You will typically face a few ongoing insurance costs, with homeowners insurance being the most obvious. However, there's one that depends on your financial situation heading into the agreement. Lenders mortgage insurance is applied for any loan where your deposit is less than 20% of the total purchase price. Until your total mortgage payments have paid off 20% of the loan amount, LMI will be required.
Unlike the above ongoing expenses, it's not always easy to predict what home repairs and property maintenance will cost. Real Estate View noted that this means you should always be prepared to pay for upkeep of between 0.5% and 1% of your property's total value at any time, setting aside roughly that much for such an expense each year. If you need to tap into it, it's there for you, and if not, you can roll it over into the next year and be more confident in your ability to manage unexpected difficulties.
When you're thinking about buying a home, it's important to get all the information you can to ensure you can make the most informed decision and find the property that's just right for your personal and financial needs. That can start with some advice from an experienced real estate professional. At Ray White Surfers Paradise, we have closed countless sales and helped our clients find the perfect property, and we'd love to do the same for you. Get in touch with us today to learn more.