When looking to purchase a property or refinance your current loan, it is important to consider the costs to establish a mortgage which include government stamp duty and registration fees, lawyer & conveyancing costs, building and pest inspection and loan application fees. It’s important to note that these costs can significantly vary depending on your location, your loan amount, the value of your property and the lender you select.
Navigating Mortgage Costs in Brisbane
As an example, if you were to buy an established home in Brisbane for $1,000,000 and you have a 20% deposit, you can expect the following costs to apply:
Stamp Duty, Registration & Transfer Fees - $34,753
Conveyancing Cost - $1500
Lender Fees - $0 to $800, depending on the lender selection.
Total = $36,253 to $36,553
For a refinance you would only need to factor in lender fees & mortgage registration costs – we would estimate your “switching costs” around $800 to $1300. Note that certain lenders can offer up to $4000 cash back to cover these costs.
If you have less than a 20% deposit (or equity in your home for a refinance) you will also need to consider Lenders Mortgage Insurance (LMI). LMI varies depending on the loan amount, lender and purpose of the funds. In certain circumstances LMI can be waived.
A good Mortgage Broker can quickly calculate what the LMI fee would be based on your specific situation or if it can be waived.
Exploring Mortgage Types: Finding the Perfect Fit
There are numerous mortgage options which can be a bit confusing at times, which is why sitting down with a good Mortgage Broker to determine the best fit is so important!
Mortgage Features include: Fixed, variable, a split loan with a combination of both fixed and variable, basic loans with no frills and package loans which offer multiple linked offset accounts.
Fixed loans offer stability but limit additional repayments and offset accounts, whereas variable loans are more flexible. Note that certain lenders can offer full offset and redraw accounts on fixed rate loans.
You also have repayment choices including interest only, which could have advantages for investment loans. Whereas principal and interest repayments are popular for owner occupied loans, to enable you to reduce your home loan with every repayment.
Mastering Loan Approval: Secrets to a Successful Application
The secret to a successful application is all about the planning and preparation! Your Mortgage Broker will seek to understand your situation, gather your information, check your credit score and advise on ways to improve your position, prior to lodging an application.
Calculating your serviceability, calculating the deposit you require, helping you choose the right loan with the right lender, preparing the application paperwork and negotiation with the lender on your behalf, are some of the functions that can be very valuable to ensure a successful application. Your Mortgage Broker should be able to assist you with all these functions.
Written by:
Will Rademeyer
Will founded Mortgage Box in 2004. Since then, he has built an award-winning team that is passionate about assisting people with financial solutions. They specialise in Investment Loans, Home Loans, Car loans, Commercial and Business loans.
Note: This content is for informational purposes only and not intended as professional advice. Please consult a qualified advisor for guidance specific to your situation before making decisions.
