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October 2, 2017

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The Costs of Buying A Home

October 31, 2017


 As well as the deposit (if you have to pay one), there are other costs you need to know about when buying a house.


Lenders: Most lenders have a loan application fee. Ensure you understand exactly what fees are applicable for your loan. A mortgage advisor may be able to help negotiate the waiver of this on your behalf.


Valuation: You may want to obtain a market evaluation. This could also be a condition of your loan. You can find a registered valuer by contacting the Property Institute of New Zealand. Your lender may have a preferred valuer so it is a good idea to check with them.


Lawyer’s fees: A lawyer will advise you when buying a house – they’ll check contracts, do a title search, explain your rights, and do all the legal paperwork (conveyancing). They can also help you to negotiate the price and other terms with the owners. Family or friends may be able to recommend a lawyer. Otherwise give me a call and i can recommend you some good lawyers in Wellington : Vinay Kumar 0275643112 or vinay.kumar@harcourts.co.nz. When you have purchased a property you’ll also need to pay a land registration fee. This records the change in ownership of the property. Usually, your lawyer will include this fee in their bill.


Land information memorandum (LIM): You may wish to order a LIM. The LIM will tell you what the council knows about the property. Check with your lawyer that the LIM covers everything you need to know. Order from the local council or visit the council to check. Feel free to click my blog on Lim 


Lender’s mortgage insurance: When borrowing more than 80 percent of the value of the property, you may need to pay a one-time lender’s mortgage insurance premium, or a higher interest rate. Lender’s mortgage insurance protects the lender, not you, if they have to sell the property because you haven’t kept your payments up to date. You can pay that fee as a lump sum, or add it to your loan. Ask your lawyer to explain this before you sign up.


Mortgage repayment insurance: You may be able to get mortgage repayment insurance, which could mean your loan gets repaid if you die. Or, if you can’t work because of illness or injury, your loan repayments could be paid for you for up to two years. Make sure you read the insurance policy carefully and check it with your lawyer before you sign.


Builder’s report: You may want to get the home checked by a suitably qualified and registered building surveyor before you go any further. Make sure you ask for an intrusive property inspection. This will tell you about the property’s current condition, both inside and outside. This inspection will also reveal any repair and/or maintenance work that may be needed and how much it could cost. You may be able to negotiate with the seller to make repairs before you move in.


Moving house: These could range from hiring a van to using a removal company to do the moving for you. You can get insurance to cover you in case anything is damaged while it is being moved from your old house to your new home.


Connecting services: You may need to pay bonds and/or fees for connections to power, phone and gas.


So all of your start-up costs together could be:


Loan application fee This depends on the lender; talk with them about what the loan costs are.


Registered valuers report from $400 Lawyers fee about $1000 LIM report $160–400


Insurance fee 1 percent* of total loan, for example, if you get a $100,000 loan; the lender’s mortgage insurance fee will be $1,000. A $145,000 loan will have a lender’s mortgage insurance fee of $1,450 Builders’ report About $400


Removal cost About $700 Bonds and connection fees About $100


Land registration fess About $100 *Starting fee will be from 1 percent.


Feel free to call or email me anytime for any other real estate advice. Vinay Kumar 0275643112 or vinay.kumar@harcourts.co.nz





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