There’s nothing quite like buying your first home. However it can also be a very confusing and stressful time if you don’t budget for all the costs involved.
The checklist below can help in identifying some of these hidden costs.
1.Loan pre-approval
As a first step you should choose your home loan provider and obtain home loan approval. There are many options to choose from. You can go to a bank or financial institution and discuss what they offer. Alternatively, a broker will have access to many products on the market and will negotiate a loan on your behalf. Some lenders charge a home-loan application fee or other fees which will need to be accounted for.
As a first step you should choose your home loan provider and obtain home loan approval. There are many options to choose from. You can go to a bank or financial institution and discuss what they offer. Alternatively, a broker will have access to many products on the market and will negotiate a loan on your behalf. Some lenders charge a home-loan application fee or other fees which will need to be accounted for.
2. Lenders Mortgage Insurance
If you are borrowing more than 80% of the value of the house, lenders will usually require you to obtain insurance on your mortgage. The amount of mortgage insurance varies from lender to lender, so make sure you discuss this as you negotiate your loan.
3. Legal Fees
A solicitor/conveyancer is invaluable in navigating the review and exchange of the contract for sale, transfer of ownership and settlement. You will need to factor in the conveyance costs involved in purchasing your new property.
4. Professional Inspection
Don’t try to save money by skipping the pest and building inspections. It may end up costing you thousands more. Significant costs can be incurred after you purchase if your home has structural or pest problems.
5. Statement of Adjustments
This document, prepared by your solicitor/conveyancer prior to settlement and will deal with any outstanding amounts including council and water rates and body corporate fees (if applicable). You can get an estimate of these costs from your solicitor/conveyancer, so don’t forget to set some money aside.
6. Insurance
Some lenders require you to take out home and contents insurance before settlement of the property. But even if they don’t, you should insure your property and its contents from the time of settlement, to avoid any unnecessary heartbreak.
You may also wish to consider title insurance. This is a once off payment for insurance that will protect you from a range of defects on title – for instance, boundary issues.
7. Stamp Duty
Stamp duty is a government tax required on every house purchase and is payable on settlement. The good news is that there are grants and exemptions for first home owners. Your solicitor/conveyancer and financial institution/broker can talk you through your entitlements.
8. Moving Costs
All the money has been paid, settlement is complete and you have picked up the keys to your new home! Now all that’s left is for you to move in. If you need to book removalists, make sure you book well in advance, and get a written quote for what it will cost so that you are prepared.
9. Connection of Utilities
You will need to arrange for the connection of electricity, gas, telephone and internet. Some providers have connection fees which you will need to take into account.
10. Ongoing fees
You will also need to consider ongoing fees such as council rates, water rates, maintenance and repairs.
As with all things, don’t be scared to shop around to get the best value and service for your money.
Please note this blog is general in nature and for information purposes only and should not be relied on for legal advice. Should you require advice regarding the information in this email please contact us so we may provide advice specific to your needs and circumstances.
