Owning a property in Australia is not as simple as it sounds. Before plunging into the homeownership journey several factors affect this decision such as personal needs, financial stability and market trends. However, owning a home may be a dream come true but one should also think about the costs associated with the property known as homeownership costs.
When it comes to purchasing a property, there’s something more than just home loans. In your homeownership journey, your property timely requires upkeep and maintenance which you cannot neglect. So, basically, we will break down the homeownership costs into upfront costs & ongoing costs in this blog.
Upfront Costs
These costs are also known as one-time costs which occur before purchasing a property. So, one should carefully consider the upfront costs for a smooth buying procedure which include:
Down Payment
It is a payment paid to the property seller that represents a part of the overall purchase price. In Australia, it typically ranges between 10% and 20% of the overall purchase price or property value. The bigger your down payment, the lower your loan amount and monthly mortgage payments.
Conveyance and Legal Fees
For protecting your legal interests and making the transaction smooth conveyancer plays a vital role. Generally, conveyance and legal fees are the third-party expenses you pay to meet the legal requirements.
It’s a good idea to hire a professional to review the documents, title paperwork and contract. However, the conveyancing fees range between $500 to $3000 depending upon your situation.
Stamp Duty
Stamp duty charges are the amount that is paid to the government while transferring the ownership title. The stamp duty charges depend upon the territory and the value of the property. For accurate charges, it is better to check up on the websites or consult with a qualified professional.
On-going costs
On-going costs include various expenses that occur after buying a property. To maintain the property and meet the financial obligations it is a must to meet the on-going costs as a homeowner.
Mortgage Repayments
This is one of the major ongoing expenses typically paid monthly. As we borrow a loan for the home purchase, we need to pay for the principal along with the interest on a timely basis. Thus, mortgage payments usually depend upon the amount you borrowed.
Council Fees
Council fees are the amounts we pay to the local council under whose control the property lies. It is important to remember that the amenities we enjoy as residents of a community are funded by council fees.
It includes garbage collection, infrastructure development, and various other services for the residents. Hence, the council costs vary on the kind of property you choose to live in.
Maintenance Costs
Maintenance costs are something that occurs until you own the property. Since your property needs timely upkeep and repairs from time to time one should prepare themselves to pay these expenses. It includes appliances, electrical and plumbing repairs which also help to add value to the property.
A homeownership comes both with financial and emotional rewards to the owner. But for making informed decisions it is essential to know the homeownership costs and break down them to align with your budget. And among all the other costs, the above are only a few of them!
