Deposit – Generally a minimum of 5% of the house cost is required as well as additional savings to pay for associated costs such as stamp duty and conveyancing costs.
Lenders Mortgage Insurance (LMI) - LMI is usually required if you borrow more than 80% of the value of the property. As the name suggests, it is actually Hume Bank, and not you as the borrower, who is covered by the insurance policy, which covers us in the event that you default on the loan and we suffer a shortfall.
Unlike traditional insurance products, there is a once-only premium payable. This is payable when your loan funds are advanced and provides cover for the full term of the loan. This premium amount is added to your loan amount.
The cost of Lenders’ Mortgage Insurance varies depending on the amount of the loan and your level of equity in the security property.
Mortgage Protection Insurance - Is designed to protect you, the borrower, if you are unable to make your loan repayments in the event of death, disability, involuntary unemployment or trauma. A Hume Bank Lender can assist you in organising mortgage protection insurance during the loan application process.
Stamp Duty - Stamp duty is a state government tax on the mortgage documents and on the property price. Stamp duty rates vary from state to state. Stamp duty on the purchase price of your property will probably represent the largest add-on expense of the transaction. Depending on individual state legislation, the duty is payable to the Office of State Revenue anywhere from the day of settlement to three months after the date of exchange of contracts.
People purchasing vacant land (on which they will start construction of a home on within six months) or people buying a brand new home may be eligible for a reduction in stamp duty.
Rebates vary between the states and depend on the property price and other factors.
Registration Fees - The Land Titles Office charges a fee to register any document relating to your property. You can talk to your solicitor or the Land Titles Office in the State or Territory in which the property is situated to work out how much the registration fees will be. A Hume Bank Lender may also be able to work this cost out for you.
Conveyancing - After stamp duty, conveyancing costs often represent the next largest administrative amount you will have to pay during your property purchase. Most people choose to engage a conveyancing expert or solicitor who will manage the process for a trouble-free exchange. Their fees will vary, as will the extent of the services provided. In some cases, the fee will include the costs of the various searches which are necessary or it may include the cost of building and pest reports. Ask up front what the cost will be and what will be included.
Inspection Fees - To avoid any nasty surprises with your property down the track it’s a good idea to get a building inspection to check the structural soundness of the property and a pest inspection to check for any signs of past or present pest infestation. Both inspection reports should list any visible defects, infestations and necessary repairs. It is important to make sure the inspection company you use is fully licensed and insured. If you're buying at auction, ask the agent if someone has already commissioned inspections – you may be able to get a copy at a discounted price.
Home and Contents Insurance – It is a condition of the loan that your home is fully insured and Hume will need to see evidence of this insurance before settlement can take place.
Many people will actually insure the home as soon as they have signed the contract to buy the home and have paid their deposit. This provides peace of mind for the purchaser in the event that something happens to the house before settlement. Hume can provide this insurance between contract signing and settlement free of charge. Beyond this period, your Lender can provide you with a quote for Home and Contents Insurance.
Council Rates – From the settlement date you are responsible for all the council, water rates and levies on a property. You may need to reimburse the previous owner for any payments they have already made on a pro-rata basis. This can normally be handled by your solicitor as part of the settlement process.
Moving Costs - Don’t forget to budget for a removalist as well as your utility connection or transfer fees.