Central Coast Home Loans

Additional Costs To Consider When Buying Property

In addition to saving for your deposit, keep in mind there are other costs to consider in the settlement process that you will need to be prepared for….

Stamp dutyCosts to consider

The fee incurred when transferring land or property from one owner to another. The amount varies from state to state.

Lender’s mortgage insurance

Lender’s mortgage insurance (LMI) protects your lender in the unfortunate case that you are unable to make your home loan repayments.

This can be avoided with larger deposits.

Building and pest inspections

It is crucial to conduct building and pest inspections before making an offer on a property. These typically set you back several hundred dollars.

Loan application or establishment fee

A one-off fee charged by banks when you apply for a loan.

Investment property loans

Saving up a deposit for an investment property is much the same as saving up for an owner-occupier loan.

Investors, however, need to carefully consider how they’ll use their deposit and which loan structure best suits their financial and property goals to ensure they get the most from their portfolios.

A few loan options available to benefit investors include:

Costs to considerPrincipal and interest repayments

Choosing to pay off your home loan in principal and interest repayments means there are two parts to your home loan payments.

Initially, you pay mostly interest, but later down the track you gradually increase the amount paid on the principal.

This is the most common way of paying off a home loan.

Interest-only repayments

Making interest-only repayments means that for a fixed period of time at the beginning of the life of the loan, the only repayments you make will be to cover interest.

Once this period passes, you begin to pay off your principal (the actual asset).

By paying interest only, if the property grows in value within the interest-only period, then equity is automatically built without any of the principal loan amount paid.

This is a great option in a growing market.

This option can offer investors great tax advantages since the only part of the finance costs in an investment property that is tax-deductible is interest.

Construction loan

If you are building a property, a construction loan could be a suitable option because the loan is received in increments as needed throughout the building process.

Line of credit

A set amount of funds that is accessible for repayments at any time.

Contact Us
Central Coast Home Loan Specialists
22 Swindon Close
Lake Haven NSW 2263
Phone: 02 4393 1945
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