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Buying property doesn’t just involve the cost of the asset, there are also legal fees and other hidden fees that should not be overlooked. Making an estimate of all these can help you fix your required loan and budget. These fees are basically based on the upfront payment and the mortgage fees that roll from home loan schemes. It is, therefore, an important task to keep an update of all the fees involved in buying a property.

Down Payment

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The down payment is the first and foremost fees involved in buying a property

A down payment is the first payment you make while buying a home. It is probably the biggest amount you need to deposit on closing the deal. All the homebuyers will need to make a down payment before buying. To figure out more about your necessary loan amounts, EMI and registration cost, follow our loan calculator link.

Origination or Application Fee

The banks charge these fees when you are registering or applying for a loan. In many instances, these services are free, but we highly recommend you apply in a place where you can trust and not fall victim to scams. It is possible to borrow up to 80% if certain conditions are met, and henceforth, the origination fee initiates your medium of application of going through all the criteria properly. 1-1.5% of processing fee is charged by different banks or financial institutes for home loans of any amount.

Document stamp tax

Different property or real-estate documents, instruments, loan agreements, paper evidencing, transfer of right or property among others needs proper validation. The stamp tax is basically the charge for making it official. The transfer of a property or deed of absolute sale may have a percentage tax involved based on the total value of the asset in question. The stamp duty on property registration is basically 1.5-3% of the transfer value. This is done in order to reduce the overall registration cost of the property.

Transfer tax or State Recording fee

Bangladeshi buildings
Real estate fees and taxes are important for securing your ownership

A fee is always there for recording the information regarding the entire transaction and the sale. This is what we know as registering deeds. To determine the exact amount of transfer tax, buyers should consult with knowledgeable people. Property advisors, such as those available at Bproperty, can help guide the buyers through this intricate process that involves the tax imposed on the type of handing over of property, either through sale or payment of a debt or otherwise. A 4% gain tax on property transfer is charged which is credited to the income tax wing of the National Board of Revenue.

Registration fees

Registering for a deed of sale, transfer or exchange of real estate property comes with a registration fee. There are different rates for different brackets of asset prices. Your real-estate advisor and legal support system will help you determine the registration fee. The total property registration cost varies between 12% and 14% of the total deed value. This includes all fees and taxes as well.

Extra Loan charges

At present, any amount of home loan has an interest rate of 9%. Hence, the chances are, buyers find it more convenient nowadays to take out a house loan when buying a property. Applying for a housing loan can mean extra costs tied to the price of the property. These are basically the insurance cost, appraisal fee, handling fee etc.

The Insurance Cost

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Understanding the fees involved in buying a property is quite an important task to avoid any confusions in future and to avoid falling victims to real estate scams

There are three types of property insurance coverage. These are replacement cost, actual cash value, and extended replacement costs. Each variable of these insurances charges differently. Knowing them properly is highly important.

Appraisal Fee

Appraisal fee justifies and notifies the exact amount of money the lender paid to you. It is an upfront fee that you need to pay the lender before the appraisal.

Handling Fee

If you are buying an old property or house, there are different service charges and maintenance fees that you need to pay for one or more than one month.

Notarial fee

Notarizing a deed is a very simple thing to do, and is mandatory for the deed of absolute sale. This usually may be a fixed flat rate or a minor percentage of the price of the property. Notarizing is very important to avoid any legal burden and is one of the most significant fees involved in buying a property. For any notary public related works, the attestation fee is BDT 10 and for contractual agreements or stamped affidavit, the fee is BDT 25.

Escrow wire fees

When you are closing the loan account, an escrow account usually holds the money while both the parties finalize the agreement. In addition, a portion of your monthly mortgage payment would probably go into an escrow account in order to pay for property taxes and insurance.

These are some of the most important fees involved in buying a property. For any confusion or queries, leave your thoughts in the comments section below.

2 Comments

  1. Kristine

    Hi my friend! I want to say that this article is amazing, nice written and include approximately all important infos.
    I’d like to see extra posts like this .

  2. Rosaura Coveny

    This is a great tip especially to those fresh to the blogosphere.
    Simple but very accurate info? Thank you for sharing this one.
    A must read article!

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