Expected Buying Costs for IP?

[Above Average]

Hi all,

I am certain that this has probably been asked many times before but I can't find it.

My hubby & I are finally at the stage (we think) of purchasing an IP.

We have found something we like but are unsure of associated costs.

We are hoping to purchase in Vic.

I think we are looking at 100% finance.

We have equity on our PPOR but not quite sure on the ins & outs of how this works.

Our PPOR is valued at $400k.
We owe $250k.
We have 3 dependents and no other debt other than our PPOR mortgage.

What sorts of costs are we looking at on top of the property cost?

Thanks,
Above Average

 

[Propertunity]

My hubby & I are finally at the stage (we think) of purchasing an IP.

Congratulations!

We have found something we like but are unsure of associated costs. We are hoping to purchase in Vic. I think we are looking at 100% finance.

Well Yes & No. Yes, it will be financed fully with debt. But with some debt for a deposit against your PPOR and the balance of debt against the IP itself.

We have equity on our PPOR but not quite sure on the ins & outs of how this works. Our PPOR is valued at $400k.
We owe $250k.

Say you take your PPOR loan to 80% LVR:$400K x 80% = $320K
Pay out existing loan of $250K = $70K cash left to use as a deposit + costs
Actually the costs of this refi will be very approx:
Mortgage stamp duty + Legals + Fee, fee, fee by lender, and others = say $2.5K
Leaving you with $67.5K cash

What sorts of costs are we looking at on top of the property cost?

Depends on the cost of the IP but for this exercise say arond $300K.

20% deposit = $60K
Stamp duty = $7.5Kish - sorry look up the OSR site in VIC for exact number
Legals = $1,200
Pest & Building = $500
Mortgage s/duty, fee for anything else
All up $2K short of your refinance amount. It should all be OK if you have $2K up your sleeves.....and no MI to pay which is good.

 

[Above Average]

Propertunity,

Thanks for your reply.

The property we are looking at is semi rural and listed at $150k.

Above Average.

 

[Rixter]

Allow 5% of the property price to cover all your purchasing costs...so borrow 105%.

Hope this helps.

 

[Above Average]

Thanks Rick,

We are new to the IP game.

Would 105% cover it?

We were thinking 110%.

Very happy if 105% covers it.


How much is stamp duty & legal costs in Vic? Would the RE agent inform us of this?

Just don't want to look too ill-informed when we make our enquiries tomorrow.

Thanks!

Above Average.

 

[Rixter]

I take it you are buying in Victoria.

Your stamp duties on mortgage and purchase can be found here

Your conveyancing solicitor will also provide you with the stamp duties , their fee's, other search fees and council/water rates adjustments etc.

Phone around to find pest inspections fees, building inspection fees and your own independent valuation fee if applicable.

Like I said all these costs will be covered by allowing 5% of the purchase price.

Hope this helps.

 

[Above Average]

Thanks Rick,

Will check out the link now.

Above Average.