Wouldn’t it be lovely if buying a house just called for the amount on the price tag of the property? In reality, first home buyers in particular, are subject to some nasty surprises if they are to purchase their first property without learning about the real costs. If you are a first home buyer, it would definitely help to learn more about the extra costs of purchasing a property.
Most first home buyers think that the most difficult part of buying a home is to save up for the deposit and to wait for the offer to get accepted. In reality, this is the easiest part of the process. The bigger challenge is ensuring that you have adequate cash to pay for the many costs that will pop up along the way. The first thing that first home buyers ought to know is that their deposit is just a part of the total purchase cost.
Two of the most well-known expenses to expect, in addition to your deposit, are your stamp duty and LMI (lenders mortgage insurance). These costs vary depending on the state in which your property is located and depending on your provider. Of course, the LMI can be avoided by paying a deposit higher than 20%.
As per the complexity of the structure, legal fees may add up to $1500 - $3000. The more straightforward the property’s ownership structure is, the lower your legal fees. You will also have to set aside around $300 -$400 for a building and pest inspection. This is especially important if you are buying a property which was previously occupied. Skipping out on this step may end up costing you thousands later on. The loan application will cost you around $600. In some cases, this amount may be waived should you be taking a packaged loan. Document preparation will cost around $200 - $300 while bank valuation will cost around $300 - $400. In order to protect you from any claims to your property’s title in the future, you will need to obtain title insurance for around $300. Registering your property with the state government will cost $75 while the water and council rates will add up to around $500 - $700. Special enquiries and legal searches may also be required and cost you around $300. All this can add up to around $11,000 - $15,000 on top of your deposit amount.
If you are looking to buy a property as a first home buyer, be sure to consult with Capital Wealth Property for a safe, secure and beneficial transaction.