Prepare These Costs Before Buying a House!
When considering house price promotions or installment plans, prospective buyers often feel that the installment payments are already within their financial means. This is a common misconception. When buying a house, especially with a mortgage (KPR), there are initial costs that must be prepared for during the mortgage application process. From booking fees to insurance, here are the costs you should prepare for before applying for a mortgage.
1. Booking Fee
The earliest cost incurred when you express interest in a property project is the booking fee. The booking fee often serves as a “sign of interest” for buyers in making the purchase.
Some developers reduce the down payment or total home price by the amount of the booking fee received. However, if you change your mind and cancel the purchase, the booking fee is often forfeited, although some are refundable depending on the developer’s policy.
The amount of the booking fee usually varies depending on the value of the house being sold, ranging from IDR 500,000 to tens of millions of rupiah.
2. Provision Fee
Another cost you should prepare for is the provision fee. This fee is a service charge imposed by the bank for processing the mortgage loan application. This fee is usually 1% of the approved loan amount.
3. Administration Fee
Unlike the provision fee, the administration fee covers the administrative processes involved in applying for a mortgage, such as document checks, surveys, and the like. The amount can vary depending on each bank’s policy.
4. Appraisal Fee
During the mortgage application process, the bank inspects the property to be purchased to ensure that the price aligns with the loan application. This fee is charged to the buyer and ranges from IDR 500,000 to IDR 2,000,000, depending on the size and location of the house.
5. Notarial Deed
The mortgage application process requires numerous legal documents. Therefore, you will need the assistance of a notary during the mortgage application process, which will certainly increase the costs involved. The amount varies depending on the value of the house and the complexity of the legal process. Other items included in this notary fee are:
- Certificate verification fee
- Deed of Sale and Purchase (AJB) fee
- Deed of Mortgage Encumbrance (APHT) fee
- Certificate name transfer fee
Customs & Taxes
By purchasing a house, you need land or building rights. Therefore, you will need to pay taxes, namely the Land and Building Acquisition Tax (BPHTB), which varies by region. There is also VAT (Value Added Tax) if purchasing a house from a developer; at the time of writing, the VAT rate is still 11%.
7. Insurance
Some banks also encourage mortgage customers to take out insurance, some examples of which are:
- Life Insurance: Protects the bank from the risk of default if the borrower dies.
- Loss Insurance: Protects the house from damage, disasters, fire, and other risks.
8. First Installment
Some banks or developers require an initial first installment payment. Ensure this fund is available early. Even if there are no fees, this can act as a safety net in case of future financial difficulties. The amount will, of course, be based on the agreed-upon monthly installments.
With this explanation of the fees, you can better prepare yourself before purchasing a home using a mortgage. Plan carefully according to your financial situation to make your installment payments more comfortable. If you’re interested in applying for a home mortgage in Depok, YUKARI Sawangan is here to meet your needs. You can contact us at 0823-1133-4579 (WhatsApp), visit us via Instagram DM, or visit the official YUKARI Sawangan website here.
