First Home Buyer Costs
If you’re about to buy a first home or even upgrading, you need to get a grip on the costs, and there are plenty. As a rough rule of thumb allow about 5% on the purchase price to cover costs excluding any Lenders Mortgage Insurance.
Here is a rough guide. Please check for actual costs in your local state or area.
Conveyancer or Solicitor
Conveyancing costs can vary across states and property values so you do need to ask this question of your local conveyancer. I always feel a good conveyancer/solicitor is worth paying a little extra for. A poor one can cost you a lot if they get it wrong. Within costs involved with conveyancing can be numerous disbursements, which are expenses incurred by the conveyancer, while undertaking investigations undertaken on your behalf, e.g. Titles Searches
Conveyancing costs can vary but generally from $500.00 to $2500.00
Title insurance protects you against a number of unseen risks. This can include items such as fraud, boundary disputes and unapproved building work. The cost is around $360 for a $500,000 property. You can read more here.
Building and Pest Inspector
A pest and building inspection will give you some idea if there are some problems you are buying that you may not be aware of. They will look for structural faults and inspect for pest infections such as termites.
From around $250 and upwards depending on detail of report.
Lenders Finance Fees
Many lenders have an application fee, legal fees and settlement fees. Some do not. Almost always they are deducted from the loan funds. This means you don’t hand over a payment they just take it out of money they are lending you.
Where they apply they are generally between around $200 and $800.
Lenders Mortgage Insurance:
See Link. I have discussed lenders mortgage insurance previously, In most cases these only apply to loans over 80% of the property value.
The cost varies with a sliding scale based on Loan to property Value Ratio (LVR). I can vary from around 1.5% to around 4% with high er loan ratios. Generally LMI is added to the loan. So for example if your loan was for $400,000 and LMI was $7,000 then the loan would be $407.000.
Stamp Duty on Property, Transfer Registration & Stamp Duty on Mortgage for Purchase
These charges applied by state governments vary with property price, state, investment or owner occupier, eligible first home buyer. Follow this link to find a calculator to compare rates in your area. http://www.realestate.com.au/blog/stamp-duty-calculator/
This insurance covers you against losses arising from damage to your home due to various defined events such as fire. On a $300,000 building cover you could be looking at around $700 – $1000 pa
This insurance covers you against loss on your personal effects and other house contents for events such as theft. On cover for around $75,000 of contents premiums could be from around $500-$800
You need to allow some funds to cover rates adjustments. This can be to either re-imburse the vendor for rates paid in advance or to pay for council rates up to a specific period. I.E end of financial year.
If you are planning to do the shift yourself you may need to budget in the cost to hire a truck or trailer.
Alternatively you may hire a removalist to do the work for you. If this is the case get clear quotes based
Don’t over look considering your personal insurances. In the case of accident or ill health having these insurances might mean you can retain your home. If you have a mortgage they can provide income or funds to meet your loan repayments. “Whats your Plan B to meet your mortgage commitments if you were unable to work due to ill health or accident?”
Don’t forget to keep some money aside to cover cleaning costs when exiting a rental property. You are likely to have costs in connecting Utilities such as phone, electricity and gas.
Bottle of Champagne (or your other favourite celebrating drink). Make sure you have something to toast yourselves achieving the significant goal of securing your first home.