You’ve been saving madly and are now looking to buy your first home or upgrade your existing home but haven’t quite worked out your budget because you are not sure of those hidden costs.
When purchasing a house or setting a budget you really do need to understand the extra costs associated with the purchase because it may change your budget entirely.
The following outlines examples of what these costs might look like, but to truly understand your budget and the hidden costs it is best that you call Nikki Berzin and organise a time to catch up.
Stamp Duty
Stamp duty could be one of the biggest costs associated with purchasing a house, so you need to understand if it’s applicable to you and how much it will add to your total purchase price.
If you are a Victorian based first home buyer, you may be exempt from stamp duty of homes $600,000 or less or eligible for a concession for homes valued up to $750,000. Each state and territory have different things on offer for first home buyers so it’s worth heading to http://www.firsthome.gov.au/ to find out what you might have access to.
As with first home owner grants and stamp duty concessions, stamp duty costs differ depending on which state or territory you are purchasing in. An example of what the stamp duty fee might cost on a $800,000 home purchased in Victoria is $43,070. To calculate stamp duty fees head to https://stampduty.calculatorsaustralia.com.au/.
Other government fees to be mindful of are transfer and registration fees.
Legal Fees
When purchasing a home it is highly recommended that you engage a conveyancer or lawyer to assist with the preparation of documents, and to also advise on any other requirements as part of the purchase. When I put together an estimate of costs for my clients I usually allow between $1,500 to $2,000 for this fee.
Borrowing Fees
Depending on which lender you go with and the loan product you choose for your mortgage will also determine what type of bank and borrowing fees you’ll incur. For some lenders an application fee can cost up to $600, and then on top of that you may also have to pay for a valuation and settlement attendance.
The other big cost here depending on the amount of savings you have is lenders mortgage insurance (LMI). Although this is one fee that can be capitalised into the loan amount, it does depend on what your loan to value ratio (LVR) is.
Building & Pest Inspection
If you are considering buying an established property, especially an older property, it is important to have a building and pest inspection done. If you are buying at auction you’ll need to have this done prior to the auction, but if you are buying via private sale you can make the offer “subject to a building & pest inspection”. The cost to do a building and pest inspection varies, but I would usually estimate around $500.
Final Count
There is so much to consider when purchasing a home, and because everyone’s situation is different there is never one simple answer. Don’t try to figure it out for yourself, and don’t get too disheartened by these extra costs. Speak with Nikki and she’ll take you through what is required and what is potentially available to you by way of concessions and grants.
Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product. Subject to lenders terms and conditions, fees and charges and eligibility apply.
