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First Home Buyer Firsts: Costs Involved

First Home Buyer Costs

We’re getting closer, can you feel it? Quick recap, we have looked at building a budget and the various government schemes/grants that are available to boost your deposit.

Now it’s time to pull those resources together and go through the initial costs involved when buying a home and the possible extras to give you a full view on what your budget may need to incorporate. This will help to reinforce your budget plan and will help to gauge a timeline for when you will be ready to buy.

What are the main costs involved when buying a home?

 

  • Your initial deposit: Usually 10% of the purchase price and paid to your solicitor at or before the time you exchange contracts.
  • Lenders Mortgage Insurance (LMI): Applicable if your loan amount is greater than 80% of the value of your property. Read our blog to learn more about LMI.
  • Loan Establishment Fee: This is the standard fee applicable to the home loan you are applying for. To get a full understanding of other potential costs that may be applicable please visit our Fees & Charges Schedule
  • Valuation Fee: Property valuation is the essential process of determining a property’s worth. When you are seeking a mortgage, this valuation assists lenders in ensuring that the property’s value adequately covers the loan amount they are considering for your purchase. Remember, the valuation fee is typically paid upfront before the mortgage valuation occurs.
  • Government charges: This covers Stamp Duty, Transfer Fee & Mortgage Registration Fee. These charges vary in each state and some of these fees may be waived for First Home Buyers if purchased with a government scheme. You can ascertain the stamp duty applicable with our calculator
  • Insurance: To protect the property you are purchasing and required from the date you sign the contract. You can learn more about insurance here.

  

What are some of the potential extra costs in buying a home?

 

Building inspections: A building inspection involves a detailed evaluation of the property by a qualified expert. The goal is to assess the property’s condition and uncover any existing or potential issues. It generally happens after the acceptance of an offer, before the contract of sale goes unconditional. Costs can vary depending on the inspection and typically start at around $300.

Pest inspections: Pest inspections are crucial for safeguarding your investment. They reveal any structural issues, safety hazards, or pest infestations that might be lurking behind those seemingly picture-perfect walls. Costs can vary for a standalone inspection and typically start at around $150. You can also look to combine your inspection with your building inspection, which could potentially reduce your costs.

Legal / conveyancing fees:conveyancer is a licensed professional who specialises in providing advice and information about property sales. Their role includes managing legal documents, researching and understanding the property title, handling the deposit, calculating adjustments and representing your interests with the seller or agent.

Moving costs: Such as removalist, cleaners, handyman and final power bills.

Council rates: Quarterly fees paid to the council for water and utilities, which usually are incorporated in with your conveyancing fees.

Strata fees: Quarterly fees paid to a body corporate if you purchase an townhouse/apartment under strata.

An estimate of how much will it all cost.

 

To put the main costs involved into perspective if you were purchasing a $750k home in NSW with a 10% deposit, we have broken down the indicative savings you would need to have to make sure you have it all covered.

The below indicative calculations are based on a First Home Buyer without the assistance of any government grants or schemes.

Purchase Price $750,000
Deposit $75,000
Mortgage Lenders Insurance $14,214
Mortgage Registration Fee $200
Insurance $2,000
Transfer Fee $330
Valuation Fee $600
Application fee $699
Total $93,043

Tip: Most people do not take all of this into consideration when planning to buy their first home. Make sure you investigate these costs in advance and create a separate savings goal or even a dedicated savings account, so you are fully prepared once it comes to getting your very first home.

Things to Remember for First Home Buyers

 

  1. First Home Owner Grant: As a first-time homebuyer, the First Home Owner Grant and potential stamp duty concessions can significantly ease these initial expenses.
  2. Stamp Duty and Transfer Fees: These amounts differ in each state. You can calculate your state amount with our stamp duty calculator.
  3. Home Guarantee Scheme: Depending on your unique circumstances, you might qualify for the Australian Government’s Home Guarantee Scheme. Explore the schemes available here.
  4. Choosing the Right Home Loan: Our user-friendly Facts Sheet allows you to explore various loan options and estimate costs. This can help you better navigate your specific needs.

Remember, if it all becomes too much we are here to help. You can start the conversation by calling us on 1300 360 744, visit your local Financial Service Centre, or book an appointment with our nearest Premium Banking Specialist. We are here to ensure your home-buying experience is smooth and stress-free.

Up next, we will go through choosing your loan and finding your home.

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Southern Cross Credit Union Ltd 82 087 650 682 AFSL 241000 Australian Credit Licence 241000. Any advice is general advice only and does not take into account your objectives, financial position or needs (your ‘circumstances’).

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