When you’re on the journey to buy a new property, understanding the costs involved is crucial. These costs can significantly influence your budget and overall financial planning. In this article, we’ll delve into the main costs associated with buying a new property, focusing on the role of Helia as a leading Lenders Mortgage Insurance (LMI) provider.
The first cost you’ll encounter when buying a new property is the minimum deposit. This deposit is typically 5-15% of the property’s value. The larger your deposit, the less you’ll need to borrow, reducing your monthly repayments. However, if you borrow more than 80% of the property’s value, you may incur LMI, a service provided by companies like Helia[1].
Stamp duty is a tax paid when purchasing a property, and it varies by state or territory[1]. It applies to both land and existing houses, but not to newly built houses. Stamp duty is applicable to primary homes, holiday homes, and investment properties, with calculation methods varying by location[1]. You can estimate your stamp duty using a calculator.
Legal fees are another significant cost when buying a new property. These fees depend on the complexity of the purchase and can vary widely[2]. It’s essential to factor these into your budget when planning to buy a property.
Lenders Mortgage Insurance (LMI) is a fee charged if your deposit is less than 20% of the property price[2]. This insurance protects the lender in case you default on your loan. While it’s an additional cost, it can enable you to buy a property sooner with a smaller deposit. Helia, a leading provider of LMI, offers a handy LMI fee estimator to help you calculate potential costs[1].
In addition to these main costs, there are other upfront costs to consider when buying a property. These include building inspections, bank fees, and moving and repair costs[2]. It’s crucial to factor these into your budget to avoid any financial surprises.
In conclusion, understanding the costs involved in buying a new property can help you plan your budget effectively and make the home-buying process smoother. Always remember to factor in these costs when deciding on your property budget.
Meta Keywords: Costs, Buying Property, Stamp Duty, Minimum Deposit, Legal Fees, Helia LMI Provider