How to save thousands when buying a new home!
When you think of what is involved in the purchase of a new home most people know they will need a hefty deposit and application fees, what we are not so educated on is the hidden costs involved that is not so openly spoken about.
In this article we discuss the hidden costs of mortgage insurance & stamp duty and what you can do to avoid or minimise these costs.
Firstly, if you do not have enough of a deposit to suit most bank’s requirements, a mortgage insurance is applied to the loan, exceeding your initial loan amount and sending your minimum repayments to higher levels.
Try to avoid this, as this cost provides protection to the bank, and is of NO BENEFIT TO YOU!
The next and possibly the biggest shock for everyone is the stamp duty involved, on top of the purchase price. This is the tax you have to pay to have a property transferred into your name and is calculated as a percentage of the value or purchase price of the property.
Don’t let this worry you too much as stamp duty is not a problem if you build your home. When you build a home, you are not purchasing it from someone else therefore no transfer is taking place, and this is where the big savings take place.
You still have to pay stamp duty on the land, but the money you save by not having to pay for it on the home is considerable.
Stamp duty is an additional cost and there are requirements and regulations to reflect the amount you have to pay, and it varies from state to state.
You can calculate how much you will pay in stamp duty by using the Queensland Government stamp duty calculator. See how much you can be saving by choosing to build your home over purchasing an existing house: Transfer Duty Estimator