Australia – First time Mortgage Buyer – Fees and Info
Eligibility
First-home buyers in Australia Victoria are duty exemption or concession – a one-off duty exemption for a PPR valued up to $600,000, or a concession for a PPR with a dutiable value from $600,001 to $750,000
You will need to live in the property for one year after purchasing it ( Not rent )
Example of Stamp duty on a property $750,000 is 47,000$
Fees when purchasing a property
Conveyancing
This is the legal legwork of checking the land , transferring the deads after the money has come through etc , Full List can be found here: Conveyancing fees should not exceed 1000$
Transfer of Land Act – Property and land titles
$114.60 : You have to pay this each time when you add yourself AND the mortgage company to the mortgage and also again when you pay off your mortgage and remove your bank from your deed
Transfer fee
$1,499.00 ( Exmaple 600,000$ property )
Mortgage
Interest Rates
This is the rate which is set by a countries bank at which borrowers and lenders should borrow and lend money at. When economy is good , this will be high to attract people to save money to make sure inflation does not occur. When economoy is bad this will be low to attract people to spend and borrow.
There are three ways a borrower can lend you money via a mortgage
Variable Rate – The rate you borrow at is based on the current interest rate ( give or take the banks fees ) this changes daily. This is good if you think the interest rates are heading down e.g. economy looking week. A variable rate is also good because you can pay back the Mortage at this variable rate straight away. If you suddenly came into money you are allowed to pay down immediately your variable rate.
Fixed Rate – You lock in a rate and a time period. E.g I will pay 2% over a 2 year period. This is good if you think the economy is improving and interest rates will rise you can lock in a rate so you are not effected by this. The downside is if the rate goes down its VERY expensive to break out of the rate. Some mortgage lenders will let you payback more if needed at your fixed rate , usually no more than 30,000& / year.
Fixed and Variable Rate – You split your mortgage and use fixed and a variable rate meaning you get the advantages of both.
How much can I borrow?
Its usually best to never borrow more than 20% of the property which means you need to have more than 20% as a deposit. If you want to borrow more you will need to purchase Mortgage insurance which is another cost
You can borrow up to the incoming coming into your household ( depending on existing loads , children or other liabilities ) at 5 x your yearly salary