Government Fees for Home Purchases

If you have done some research on mortgage costs in home buying you know there are a variety of lender fees which can vary from lender to lender and are often negotiable.  This is why it is so important to shop around and compare not only the interest rate charged by particular lenders, but also their fees.  Smart buyers know that in many instances the mortgage loan with the lowest interest rate is not always the cheapest loan.  Beware of those lender fees!

Government fees, however, are assessed regardless of the lender you choose.  Here are the four main types of government fees:

Stamp duty on the purchase price of the home
Mortgage duty (a stamp duty on the amount of the mortgage loan)
Mortgage registration fees
Transfer fees

Some people think when governments get involved, everything becomes complicated and this is certainly the case when it comes to home purchases.  The fees charged vary by state and territory.  Some states don’t charge the mortgage Duty fee and others have different levels of mortgage Registration Fees.

It is important to know what fees you will be charged and how much they are before you go to the settlement meeting for your home purchase.  These fees are generally assessed at settlement time and deducted from your loan amount.

If you are working with qualified real estate agents and reputable mortgage lenders they should be able to inform you of these additional costs.  If you are buying on your own, it is crucial you consult the State Revenue Office for your state to determine the fees for which you will be liable.

First time home buyers are exempt from certain fees, especially if they qualify for the First Home Owner Grant (FHOG).  Again, you need to check with the Revenue Office in the state of purchase to assess your own situation.