Buying a home is a very exciting and somewhat daunting time, especially if it’s your first!

Throughout the excitement of finally saving your deposit and being ready to visit open homes to search for potential purchases, it is important to remember to take into consideration the various other costs that are generally associated with buying a home.

Below is a list of costs that need some consideration;

Stamp duty: And other government fees including Registration of Title/Land Transfer Fee for example. Stamp duty is the main consideration here. Stamp duty is a tax put in place by the state government (varies state to state) in relation to the transfer of land and/or property.

This link is a good guide to help you calculate the amount of stamp duty payable on your potential purchase-

http://stampduty.calculatorsaustralia.com.au/

Legal fees: Each property transaction requires transfer of ownership of the property to you. You will need to employ the services of a Solicitor or Conveyancer to take care of the legal aspect of this for you.

Home loan application fees & mortgage establishment fees: Most lenders charge a home loan application fee as well as a home loan application fee to cover the costs of legal contracts, property title checks, credit checks and set up costs. Speaking to an investment savvy mortgage broker can defiantly help here.

Property valuation: Your lender will need to get valuation of your property to ensure they are comfortable that it is worth the value you are willing to pay for it. They will generally charge a fee to carry out this service.

It is important to note that the lender will not accept your valuation, even if you have paid an independent valuations expert to produce it for you.

Mortgage registration fees:  All mortgages must be registered with the government and a registration fee will apply.

Lenders Mortgage Insurance: If you plan on/need to borrow more than 80% of the value of the property you will be required to take out Lenders Mortgage Insurance by law.

It is important to note that this insurance is for the lender in case you default on your loan, it does not cover you in the event you cannot make your repayments.

Building & Pest inspection fees:  Once you find a property that you think may be the one for you, it’s critical that you do the proper due diligence on it, including obtaining a building and a pest inspection report.

These reports will give you an accurate idea of the structural condition of the property and help you assess the potential on-costs of maintaining it moving forward.

These reports should be obtained on every property before you commit to purchasing.

Necessary Insurances:  It is extremely important that you organise the appropriate insurance cover to protect your hard-earned asset against disasters like fires, floods, theft or damage by tenants if you plan on purchasing an investment property.

This may include; Building insurance, Home and contents insurance, landlord insurance etc.

The building insurance section of your cover needs to be taken out as soon as you put down your deposit to make sure you are covered while the purchasing process is under way.

Income Protection Insurance: It is important that you are able to cover your mortgage repayments in any situation, including the unlikely event you are unable to work due to sickness, injury or any other unforeseeable event that causes you to be without income. For this reason, it is important to look into income protection insurance to give you some peace of mind that you will be able to hold onto your property throughout these unfortunate situations.

The costs of moving in & living costs: Like all of the above mentioned potential costs, these will vary greatly dependent upon you as the individual, the home you purchase, how you purchase it, the type of home you purchase etc. However, here are some potential costs of moving in to consider.

  • Utility costs:These may include gas, water and electricity supply. You can plan ahead and have these things ready to go on the day you move in. Remember to shop around for a competitive rate.
  • Body corporate fees:if you are buying an apartment or a strata title property, it is likely that you will have to pay monthly body corporate fees. It’s important you check out these fees as part of your due diligence when you are looking to buy your property as they can be quite significant, particularly if the property is in need of a lot of maintenance or repair.
  • Council rates:this cover the costs of your garbage collection and other services in the area provided by your local council. The cost involved will generally vary depending on the value of your property so you should check with the council to determine these costs.
  • Ongoing maintenance:all homes require ongoing maintenance so it’s important to budget for when the time comes. If you plan on renting your property out, you as the landlord pays for anything that goes wrong, so if the hot water stops working, you replace it. Likewise, if something goes wrong in your own home, you have to pay to have it fixed so it’s wise to set aside a little money for emergencies.
  • Moving costs:The cost of a removalist or even the truck hire if you plan to do it yourself. Again, shop around for a competitive rate.
  • Getting your home set up: You’ll need furniture and a fully stocked fridge! Try to budget for the things you’ll need to get set up in your new home. Furniture can get expensive!

Remember, failing to plan is planning to fail. Get this right, and try to enjoy the process.