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There’s so much about home ownership that nobody ever tells you. Let’s clear a few things up.
Stamp Duty
Stamp duty, also known as transfer duty is a one-off, state-based tax so it varies according to the state or territory where you buy. Stamp duty is calculated based on the price you pay for your home. The good news for first home buyers is that — in addition to the First Home Owner Grant — you may be entitled to valuable savings on stamp duty in some states. Take a look at the stamp duty calculator to know how much you will pay on your first home. Some lenders will let first home buyers borrow money to cover the cost of stamp duty. If this sounds like you, it might be a good idea to talk through options with us.
Conveyancer or solicitor fees
When you buy your first home, the property will need to be formally transferred into your name. This process is known as ‘conveyancing’ and calls for some legal expertise. Just like reviewing the contract of sale before you sign it, you might want to think about paying a conveyancer or a solicitor to do this for you — the peace of mind can be worth the expense.
Conveyancing costs can vary, so think about shopping around and enquire about the fee before you commit to using a particular conveyancing firm or solicitor.
Building and Pest inspections
The last thing you need is to buy a home with dodgy building work or a serious pest problem. In addition to doing your own inspections before purchasing a home, you should organise a professional pre-purchase pest and building inspection. To find a service near you, search for “pest and building inspections”, seek reviews and contact a couple of providers to compare prices.
Lenders Mortgage Insurance
When you borrow more than 80% of your property’s value, you usually need to pay LMI. This is insurance to protect your lender if you’re unable to make your loan repayments down the track. LMI is a cost you can pay upfront or, depending on how much LMI you need to pay, it may be added to your home loan amount.
Loan application fee, and other bank fees and charges
A mortgage loan application fee is charged by your lender to process and set up your loan. It’s usually one of the bank fees and charges that come with your home loan - be sure to check what they are with your lender.
Valuation fees
Fees for bank or independent valuations of a property.
Inspections
Building and pest inspections are essential to ensure the property is structurally sound, and that there are no termites or other pests.
Home insurance
For settlement to go through, you must have building insurance. Also consider getting contents and portable contents insurance.
Moving Costs
You’ll probably need to pay for a removalist to help you move. Also allow room in your budget for the connection of utilities like electricity, gas, water and internet.
Ongoing costs
Once you’ve moved in, there are costs besides your home loan repayments that you need to consider, such as council rates, strata fees, utility bills, insurance and property maintenance.
Understanding the costs that come with buying a home in addition to the property’s purchase price helps you plan your savings accordingly. It also gives you a clear idea of what you can afford, so you can narrow down your property search and find the home that’s right for you and your budget.
Grove Brokerage
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