What Expenses to Prepare before Home Loan? Salaryman edition

1. 1. Legal Check/Home Inspection Fee
   

   This process is often overlooked but recommended for both new or second-hand houses/apartment before making a purchasing contract. It will minimize the potential risks associated with the house’s legal status as well as construction and infrastructure systems, helping buyer to prevent long-term repair issues and costs after moving in. You should spare some time for this, fee could be from 2 million VND or more depending on how much details you want to check and who you call to support this job.

2. 2. Down Payment

   This is a crucial aspect that cannot be overlooked when planning to buy a house/apartment. Typically, a down payment of at least 20% of the house price is required (average down payment in market is around 40% of property price, depending on your financial capability, negotiation or developer condition). The remaining payment of your property after down payment should not exceed 100 times of your salary to unsure you have healthy monthly expense.
   
   Tip: Buyers should consult with a home loan advisor from the bank to ensure they are qualified for the loan and can secure the loan before making any down payment to the seller.

1. 3. Appraisal Fee

   This fee is charged by the bank to home buyers for the process of valuing the property. The appraisal fee typically ranges from 2 million - 5 million VND depending on the province location, size or value of the property (average 2.5 million VND in HCMC).

2. 4. Notarization Fee of Sales and Purchase Agreement (SPA)

   This fee is incurred during the contract process between the buyer and seller, and the payee is determined through negotiation between the buyer and seller. This notarization fee is calculated based on the land unit price issued by the government. The price varies from 1 million - 70 million VND (average 2.5 million - 6 million VND for a property under 10 billion VND). The calculation as ‘Table 1 Notarization Fee’:
   
   Table 1 : Notarization Fee
   
   

   	Asset value or contract value, transaction	Collection level (VND/case)
   1	Under 50 million VND	50,000 VND
   2	From 50 million - 100 million VND	100,000 VND
   3	From over 100 million - 1 billion VND	0.1% of asset value or contract value, transaction
   4	From over 1 billion - 3 billion VND	1 million VND + 0.06% of the asset value or contract value, transaction exceeding 1 billion VND
   5	From over 3 billion - 5 billion VND	2.2 million VND + 0.05% of the asset value or contract value, transaction exceeding 3 billion VND
   6	From over 5 billion - 10 billion VND	3.2 million VND + 0.04% of the asset value or contract value, transaction exceeding 5 billion VND
   7	From over 10 billion - 100 billion VND	5.2 million VND + 0.03% of the asset value or contract value, transaction exceeding 10 billion VND.
   8	Over 100 billion VND	32.2 million VND + 0.02% of the asset value or contract value,transaction exceeding 100 billion VND (maximum collection is 70 million VND/case).




3. 5. Legal Fee

   This is the legal document processing fee, costing around 1.4 million to 1.5 million VND.

4. 6. Fire Insurance Premium

   Fire insurance is a legally required item when applying for a home loan for both houses and apartments. This insurance serves as collateral for the bank in case the house is damaged by fire and various disasters (e.g., explosion, lightning, natural disasters, and water damage).
   KBank will offer a fire insurance premium for free at a rate of 0.02% of the sum insured throughout the loan contract and cover 110% of the loan outstanding or building value, whichever is lower.

1. 7. Transferring Ownership Fee

   The transferring ownership fee includes two items:
   1.Registration Tax: 0.5% of the property value.
   2.Certificate Issuance Fee (new cover fee): When transferring real estate ownership, if the transferee or donee requests and is granted a new Certificate, this fee will be required. It varies from province to province, with the collection rate being under 100,000 VND per time per paper.

2. 8. Mortgage Registration Fee

   It's the mortgage registration fee, depending on how many pages the dossier may consist of, normally around 660,000 - 800,000 VND.

3. 9. Notarization Fee of Mortgage Agreement (MA)

   This fee is calculated based on the value of the asset. If the mortgage or pledge contract states the loan value, it will be calculated based on the loan value Rate: notarization for MA cost around 1.5 million - 70 million VND (normally ranging from 1.5 million - 5 million VND for a home loan of salaryman). The calculation is as ‘Table 1 Notarization Fee’.

1. 10. Furniture & Decoration Expense 

   Another expense that can cause home buyers to overspend is the cost of furniture, appliances, and home decorations. To avoid exceeding your budget and impacting other expenses, it is essential to plan carefully.

2. 11. Property Management Fee (applied for housing estates and apartments/depends on property contract)

   The price varies based on the condition of the developer and the size of your property.

3. 12. Loan Monthly Repayment

   The monthly repayment amount is determined by the interest rate, the loan amount, and the loan tenor. It is important to review the bank’s repayment policy and adhere to the repayment schedule to avoid incurring overdue charges. For KBank, the monthly repayment will automatically be deducted from the K PLUS account on the 15th of each month, beginning from the month following the full disbursement of the loan.
   
   Tip: Buyers should consult with a home loan advisor from the bank to ensure they are qualified for the loan and can secure the loan before making any down payment to the seller.

Sample case: