Whether you are a first home buyer or moving on to buying your next “bigger and better “ home, you would be no doubt aware of how much money you have put together to make that purchase.
Just to be sure you have covered off everything before completing this purchase, it is well worth taking the time to check off everything you need to do, so there are no costly hidden surprises before you settle in.
Staying ahead of the game will definitely save you time and money and ensure that your buying experience is as exciting as it should be.
Make sure that you budget for everything … including your housewarming party!
Here are seven items that you should be aware of as part of your budgeting exercise:
Not all funders charge upfront application fees and valuation fees. These fees are over and above what you are required to pay for your deposit. You need to compare these costs as part of your home loan selection process and should be accounted for in advance. Some funders also charge ongoing account keeping fees, which should also be taken into account as they can add hundreds of dollars each year to your repayments.
Bear in mind too, if you borrow more than 80% of the value of your home, you’ll need to budget for the cost of lenders mortgage insurance. The good news here is that you don’t necessarily have to pay this upfront as it can be added to your loan and paid out over the term of the loan.
Stamp duty is a State Government tax on your property purchase and can vary from State to State.
If you are a first-home buyer, you may also be entitled to concessions on stamp duty.
It might sound obvious, however, when buying a property, you need to make sure that you are buying it from the legal owner of that property and that when you complete the purchase, the legal ownership is transferred to you. Your mortgage documents also need to be checked from a legal perspective to make sure they are in order. Mistakes here can be a very costly, so it is always best to use a solicitor or conveyancer to formalise and check these transactions.
It is important to have your solicitor or conveyancer check your contract to determine when you should take out Property Insurance as each State has its own rules as to when the risk of damage to the property transfers from seller to buyer. For example, in NSW, the buyer is responsible for damage to the property on settlement whereas in the ACT the buyer is responsible for damage to the property as soon as contracts are exchanged.
Premiums can vary widely so make sure you shop around. Once you move in to your first home it’s sensible to add contents cover to the mix.
5 . RATES AND STRATA FEES
Unlike renting, where you pay a landlord a fixed amount to live in their property, a house you own has extra living costs. As a property owner you are now also liable to pay for Council and Water Rates. If you are purchasing an apartment, you will need to pay additional fees to a strata corporation to cover the costs of communal needs like cleaning, gardening and building maintenance etc.
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 these costs may also be payable when you settle on the property, so it’s worth checking to find out what’s due when.
Moving always takes more time and effort than you think! Everything you own needs to be carefully packed and made ready for the big move. Getting some help will make things much easier. Downloading our moving checklist is a good start!
Moving costs can range from the price of a case of beer for your strongest mates right through to several thousand dollars for professional removalists. It makes sense to check out a range of options, and remember, if you have some items that you haven’t used in years, now would be a good time to give them to someone who may have good use for them. (I have always found “Vinnies” or the “Salvos” willing to help and very appreciative).
Organising a pre-purchase pest/building inspection will tell you upfront if a property has issues like poor wiring, illegal renovations, structural problems or an infestation of termites. These issues don’t necessarily mean you have to walk away from the purchase. It may for example be worth asking the vendor to make good before you commit to the purchase or maybe ask for a drop in price equal to the cost of some of the repairs required (not renovations). Whether the vendor agrees or not, you should factor in any repairs that need to be done before you move in.
If you have renovations in mind, check out any council requirements and speak with a reputable builder to come up with an accurate costing. Make sure you check that the builder holds a current licence and insurance to cover the work quoted for (in case anything goes wrong).
Buying a home is probably one of the biggest, scariest and most exciting purchases you’ll make in your lifetime. Factoring in the other costs when buying will help you to move in on budget and without any nasty shocks to your bank balance.
If you need some clear answers about how much your home purchase will really cost, we can help with advice and some more tools that will help make this an easier and more enjoyable journey for you.
We understand that everyone has different questions, so if you need them answered, please book in a call. We are here to help.
PS This article is prepared based on general information. It does not take into account individual financial or property objectives or needs and is not financial product or investment advice.