Loan application fees

Loan application fees are often charged by lenders to offset the cost of assessing and setting up your home loan account.

Loan application fees are often negotiable, and some lenders do not charge application fees at all.

Ask your lender for information about its application fees.

Many lenders allow you to add application fees to your loan.

Purchase deposit

A deposit is money that you put towards a house yourself. In most cases, it can''t be borrowed.

The HNZC Welcome Home Loan allows some lenders to provide home loans without you first having to save a deposit.

Some real estate agents will ask for a deposit when you make an offer on a house. You need to be aware that this is not a legal requirement. You should pay your deposit only when the contract is unconditional.

A deposit is normally between 5% and 10% of the purchase price of the house you wish to buy. So to buy a house worth $150,000, you would need to have at least $7,500 saved.

Low-equity fees

If you borrow more than 80% of the value of a house, you may need to pay a low-equity fee. The lender charges this fee to offset the extra risk involved in lending more than 80% of a house''''''''s value.

Low equity fees are also referred to as "lender''''s mortgage insurance" (LMI). This insurance covers any gap between what you owe at the time you sell the house and the amount you sell the house for.

LMI also protects the lender (not you) if they have to sell the property because you haven''''t kept your payments up to date.

Low-equity fees can cost up to 1.2% of the amount of the loan. Some lenders allow you to add the low-equity fee costs to your loan.

Legal fees

Legal fees are paid to your lawyer for completing the legal paperwork associated with buying your home.

It''''s their job to advise you when buying a house. They''''ll check contracts, do a title search, explain your rights, and do the legal paperwork. They can also help you to negotiate the price and other terms with the owners.

If you don''''t have a lawyer, family or friends may be able to recommend one. Otherwise, ask your local law society or look in the phone book.

Generally legal fees cost between $400 and $1,200. Fees vary from lawyer to lawyer, so it pays to shop around.

Some lenders allow you to add legal fees to your loan.

Valuation costs

A registered valuer needs to assess what a house is worth so that your lender can be sure that you aren''''t paying more than the house is worth.

If you''''re borrowing less than 80% of the house''''s value, your lender may not require a valuation report.

$400

Builders'''' reports

When you find a house you want, it''''s a good idea to get it checked by a suitably qualified and registered building surveyor before you proceed any further.

Make sure that you ask for an intrusive property inspection. This will give you information about the property''''s current condition, both inside and outside.

$400

Outstanding rates

On the day you buy the house, the local council calculates what proportion of outstanding rates the seller should pay and how much you should pay.

The amount will vary depending on when the rates were last paid and how many days remain in the current ratings period.

Your lawyer should be able to provide you with an estimate of the cost.

Moving costs

• Telephone
• Power and gas
• Movers
• Insurance

You''''ll probably have costs for moving your things to your new home. These will vary depending on whether you hire a van and move yourself or use a removal company to do the moving for you.

You may also need to pay bonds or deposits for the connection of telephones, gas, and power.

It''''s also important to think about house and contents insurance. Lenders require you to have house insurance before they will give you a home loan.

Moving your possessions can cost between $100 and $1000 if you''''re only moving across town. The actual amount depends on how you organise to move your things from your existing home to your new home.

Telephone, electricity, and gas providers will be able to tell you whether you need to pay a bond or deposit to have these services connected.

LIM (land information memorandum) reports

You get a LIM report from the local council. This report sets out everything that the council knows about the property.

The report will include information about rates, drainage, consents, permits, and any problems with erosion or flooding.

The deposit for a LIM is $200. At the end of the LIM process, the actual cost of the LIM will be calculated and you will receive either a refund or an invoice for any additional expenses.

LIM reports must be produced within ten working days. However, yours may arrive sooner. If there is going to be an extra delay, the council will let you know.