All Topics / The Treasure Chest / Hidden Costs

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  • Profile photo of Gatbe7Gatbe7
    Member
    @gatbe7
    Join Date: 2003
    Post Count: 42
    May 28, 2003 - 5:19 am

    Hi All,

    I just have one quick simple question. How much do you need to allow for the “hidden”costs? These would be items such as legal fees, buying of furniture (new), stamp duties, conveyancing / search costs, management fees.

    Sorry if this sounds dumb but I have always rented property and am looking at buy-to-rent investment.

    Thanks

    Adam

    Profile photo of MarcoMarco
    Member
    @marco
    Join Date: 2003
    Post Count: 66
    May 28, 2003 - 6:32 am

    Hi Gatbe7,

    I always allow 5% of the contract (my) price. That’s the short answer, but someone else may expand on it.

    regards

    Marco

    Profile photo of fastainvestafastainvesta
    Member
    @fastainvesta
    Join Date: 2003
    Post Count: 14
    June 10, 2003 - 1:37 pm

    Gatby
    Try http://www.yourmortgage.com.au/calculators/
    there is lots of juck but some good starting points and ideas. For quick estimates I allow 5% also, but then refine it down when we are doing the calculations. If you regularly use a conveyancing solicitor, you should be able to call them and they can do the legals and stamp duty figures very quickly.

    Profile photo of traceyimbtraceyimb
    Participant
    @traceyimb
    Join Date: 2003
    Post Count: 82
    June 10, 2003 - 3:16 pm

    Hi Adam
    Try using one of the purchasing costs/calculators on one of the banks websites. They are quick to use and very accurate.
    Cheers[:D]

    ***************
    Tracey Imbuldeniya – Finance Consultant
    Ph: 0401 674464
    Email:[email protected]

    Profile photo of OttoDarganOttoDargan
    Member
    @ottodargan
    Join Date: 2003
    Post Count: 9
    June 11, 2003 - 2:09 am

    Hi Adam,

    The 5% rule is great, but if you want to break it down further here is how it usually looks…

    Loan application (inc valuation): 600
    Legal Disbursements: 150
    Registration of mortgage fee: 124 (Gov charge)
    Settlement fee: 100
    Borrowers solicitor: up to 1500
    Mortgage Stamp Duty: $5 + ($4 for every $1000) borrowed over $16,000)
    Stamp Duty: See http://www.osr.nsw.gov.au for details… varies between states and goes up with the purchase price
    Lenders Mortgage Insurance (LMI): usually paid if amount borrowed is over 80% of the purchase price… This is usually up to 2% of the amount borrowed
    Insurance: Not sure how much, but it is required to settle the purchase.
    Furniture: Not sure, a couple of thousand up to 20,000 of so, depending on taste :)

    Otto Dargan
    Home Loan Manager
    Mortgage House Five Dock
    0297128988
    [email protected]

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