First Home Buyers – Know All The Costs
KNOW YOUR NUMBERS! – A number of factors will affect the amount of additional money you will need on top of your actual home cost, including the state you are purchasing within, property type, nature of your loan and deposit amount. It is worth seeking advice from your financial advisor, accountant or potential lender as to the additional home buyer costs you are likely to incur.
◉ Stamp Duty – This is applied on the purchase value of a property and charged by state and territory governments to the buyer of a home. Stamp Duty can be sizeable depending on location. For example, the Stamp Duty on a $500,000 property with a 20 percent deposit, will come to $25,138 in South Australia, $18,311 in New South Wales, $14,658 in Victoria, $13,843 in Western Australia and $1,311 in Queensland.
Ask us about the current NSW Stamp Duty Concessions – currently: Pay NO stamp duty on new or existing homes to the value of $650,000
◉ Legal searches – Professional conveyancers are often required to legally transfer ownership, but these professionals will also need to perform property and title searches to check legal credentials, and these will attract fees.
◉ Finance costs – Lenders may impose fees, such as application, valuation and settlement fees. There are also insurance costs to consider.
◉ Lender’s mortgage insurance – This may apply if you need to borrow more than 80 per cent of the purchase price of the property. This is a one-off payment and in most cases you will be able to consolidate this (add to) your home loan. Lenders’ mortgage insurance protects your lender in the unfortunate event of you defaulting on your home loan.
Your buying decisions should reflect affordability considerations and understand what you can comfortably afford, taking into account all the extra costs of home ownership that you may not currently be exposed to, namely:
◉ Rates – issued per quarter
◉ House and contents insurance
◉ Water usage
◉ Maintenance and upkeep
◉ Only by assessing all of the costs involved in home ownership will you be able to determine you weekly or monthly costs and thus your affordability.
Often First Home Buyers overlook these on-going costs and it is important you understand everything involved in becoming a home owner. By speaking to a financial expert you will then be able to identify what your budget for your new home will be. ‘Understand all the on-going costs involved before you do anything’