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Breez Forms

What are the costs involved?

A construction loan is similar to another other mortgage loan with the major difference being in the way the loan is drawn down. The building contract is administered in stages such as deposit, slab, roof, frame, fixing and completion. At each stage a valuer inspects the property to ensure that the builder is making the correct progress claim for the stage that the building is at. You need to be aware that the lender’s valuer is not necessarily assessing whether good workmanship has been conducted so you should personally take an interest in your loan being constructed.

 

The lender will need equity to be available at every stage of the build, therefore you will be asked to contribute an initial amount toward the construction, unless your land holds sufficient equity. This is something you should discuss with your lender.

 

Depending on whether you are purchasing or refinancing your land, the costs of a construction loan are very similar. There will be some additional costs for the lenders valuer inspection fees, and the lender will be able to obtain a quote for these from the proposed valuer. There are normally the initial valuation plus 4 more inspections however this can vary from one construction contract to another depending on the drawdowns that the builder requests.

 

For owner builders and kit homes there will be two additional fees payable due to the higher cost of managing kit home contracts and owner builders:

  • a construction administration fee of $250


  • owner builder management fee of $1000

 

When building a house the length of construction period may become an issue. As you will be expected to make loan repayments right the construction period, you may have to account for any extended building time due to delays caused by rain etc.

Breez Finance allows for interest only loan repayments to be made during the construction period.

Some of the fees that you could expect to incur are outlined as follows:

Fees you have to pay when refinancing your home loan

 

  • Registration of mortgage fee
    this is a government state based fee which your conveyance firm can confirm.
    It is likely to be in the vicinity of $150.00.


  • Transfer of mortgage fee
    this is a government state based fee which your conveyance firm can confirm.
    It is likely to be in the vicinity of $150.00


  • Legal fees
    factor in about $750 for your conveyancer or lawyer to refinance your loan. You should get a quote before you make any assumption of cost as there is a significant variation from one company to another depending on the service they provide.
  • Stamp duty
    For straight refinancing of your loan, no stamp duty is payable, however if you borrower more than your original loan amount, you will have to pay duty on the additional amount only.

 

Fees you may have to pay when refinancing your home loan

 

  • Exit fees (charged by your current lender)Check your loan agreement for the amount payable.
    The exit fees may also include discharge fee, break fees, document retrieval fee.

  • Loan application/establishment fee (charged by your new lender).
    Obtain a quote from your new lender before signing your loan approval.

  • Lenders Mortgage Insurance (LMI)
    Whenever you have less than 20% deposit, you will almost always have to pay mortgage insurance or LMI. This insurance is a one-off payment by the borrower to the lender (or lender's insurer) to insure' the loan. It insures the lender for any short fall on a loan, so if you were sold up because of defaults, it covers the difference between what you are sold for and the amount still owing. As mortgage insurance is worked out on a sliding scale, you will need to ask your lender for a quote before you can budget for this cots. The higher amount you are borrower, and/or the less downpayment you make, the higher the LMI becomes. If you have 20% or more deposit and all other factors are in line, LMI may be paid by the lender.

  • Lenders valuation fee
    Your lender will expect you to pay for the cost of a valuation. The price is usually around 0.05% of the property purchase price.

 

The various fees and charges can be found at the State Lands Titles Offices

 

VICTORIA

Title Registration Services

Marland House

Level 10

570 Bourke Street

MELBOURNE VIC 3000

Telephone: (03) 8636 2010 (03) 8636 2010

Website: www.land.vic.gov.au

 

NSW

Land and Property Information

GPO Box 15

SYDNEY NSW 2001

Telephone: 1300 LANDS

Telephone: (02) 9228 6666 (02) 9228 6666

Website: www.lands.nsw.gov.au

 

WESTERN AUSTRALIA

Dept of Lands Administration

PO Box 2222

MIDLAND WA 6936

Telephone: (08) 9273 7373 (08) 9273 7373

Website: www.dola.wa.gov.au

 

TASMANIA

Land Titles

PO Box 541

HOBART TAS 7001

Telephone: (03) 6233 8011 (03) 6233 8011

Website: www.dpiwe.tas.gov.au

 

QLD

Dept of Natural Resources and Mines

GPO Box 2454

BRISBANE QLD 4001

Telephone: 13 13 04

Website:www.nrm.qld.gov.au/property/titles

 

SOUTH AUSTRALIA

Lands Services

GPO Box 1354

ADELAIDE SA 5001

Telephone: (08) 8226 3855 (08) 8226 3855

Website: www.landservices.sa.gov.au

 

ACT

Land Titles

PO Box 225

CIVIC SQUARE ACT 2608

Telephone: (02) 6207 0491 (02) 6207 0491

Website: www.rgo.act.gov.au

 

NORTHERN TERRITORY

Land Titles Office

GPO Box 3021

DARWIN NT 0801

Telephone: (08) 8999 6520 (08) 8999 6520

Website: www.nt.gov.au