When taking out a bond to finance the purchase of a property, there are costs involved that need to be taken into consideration. Here's a breakdown of some of the bond costs that may be incurred:
Initiation fee: this is a once-off fee charged by the bank to initiate the bond. The fee is calculated as a percentage of the bond amount and can vary between different banks.
Administration fee: the bank may charge an administration fee for setting up the bond account and managing it. This fee can be a once-off or monthly fee.
Bond registration costs: when registering the bond with the deeds office, there are registration fees and transfer duties that need to be paid. These fees are typically paid by the purchaser but can be negotiated as part of the sale agreement.
The total bond costs can vary depending on the bond amount and the bank's fee structure. It's important to factor these costs into your planning when considering taking out a bond. Your bank can provide more detailed information and guidance on the bond costs involved.
In general, the purchaser is liable to pay most of the bond costs, including the initiation fee, administration fee, and bond registration costs. However, some costs, such as the bond registration costs, may be negotiable as part of the sale agreement.