Published at: 6/21/2016 3:28:59 PM
You’ll need more than just a deposit for your first home – we explain some of the overlooked costs to help you build an accurate buying budget.
Your offer is accepted; the ‘Sold’ sign is up; and you’re on cloud nine. It’s right about now you discover the hidden costs of home buying. Check out our 7 potential budget busters worth planning ahead for.
1. Loan application fees – It can be tempting to compare different loans based on the rate you’ll pay. But don’t overlook loan application fees, which can add up to several hundred dollars. Bear in mind too, if you borrow more than 80% of the value of your home, you need to budget for the cost of lenders mortgage insurance. This will vary according to how much you borrow – your ME Mobile Bank Manager can provide details for your circumstances.
2.Stamp duty – Stamp duty is like a state government tax on your property purchase. How much you pay varies according to where your first home is located and its market value. As a first home buyer you may be entitled to concessions on stamp duty, again this is something your ME Mobile Bank Manager can discuss with you.
3. Legal fees – Unless you’re a legal eagle, you’re going to need a solicitor or conveyancer to handle the legal aspects of your home purchase. This is definitely not a do-it-yourself job. Ask friends or family for a service they recommend though be prepared to shop around and compare fees.
4. Building insurance – As soon as you exchange contracts on your first home you have a financial interest in the property, and that makes building insurance a must. Premiums vary widely so it pays to shop around. Once you move into your first home it’s sensible to add contents cover to the mix. .
5. Rates/ strata fees – Take a look through the contract of sale to find out what you’ll be up for in quarterly council rates or strata levies. A portion of rates may also be payable when you settle on the property.
6. Moving costs – Moving costs can range from as a little as the price of a case of beer if you band some mates together to lend a hand, right through to several thousand dollars for professional removalists. It makes sense to check out a range of options, and remember, tackling some of the heavy lifting yourself is a simple way to trim the cost.
7. Repairs or renovations – Organising a pre-purchase pest/building inspection will tell you if a property has issues like dodgy wiring, illegal renovations, structural problems or even an infestation of creepy crawlies like termites that could rack up a solid damage bill. If you’re planning any sorts of repairs, factor the costs into your buying budget especially if the matter is urgent. If you have renovations in mind, check out any council requirements and speak with a reputable builder to come up with an accurate cost.
Your ME Mobile Bank Manager has a wealth of experience in home buying and can provide clear answers about the likely costs associated with your first home loan.