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The Extra Costs Of Buying Your First HOme


So, you are a first home owner wanting to purchase your new home. Buying your first property is certainly exciting but also can be extremely daunting. Most first home buyers don’t feel comfortable and well informed about the whole property purchase process, but this is where the Which Property team can assist you.

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We provide a series of articles that can help become a little more informed about your purchase, starting with the little hidden expenses that everyone forgets about.
No, we aren’t talking about your huge 10-20% deposit for your new home, we are talking about the small fees, that if not budgeted for, first home owners wind up in some trouble.
Here are some expenses to keep in mind:

1 – Stamp Duty
Stamp Duty is a government tax but it varies depending on what state you live in. It has the possibility to be one of the largest fees you can come across when purchasing your home (besides the cost of your house!).
First Home Owners are eligible for a Stamp Duty Concession, however, if you have bought an existing property, or a property under construction you will have to budget in your stamp duty costs.


2 – Initial Holding Deposit
Once the Expression of Interest is signed, the seller requires an Initial Holding Deposit. This deposit is a refundable amount given by the buyer to the selling agent. It shows a serious commitment to the property.
Usually the holding deposit is $1,000-$2,000, however, amounts can vary depending on the property you are purchasing.


3 – Lenders Mortgage Insurance (LMI)
If your Loan to Value Ratio (LVR) is higher than 80%, you will need to obtain a Lenders Mortgage Insurance. This is an insurance that is often payable when the borrower doesn’t have a big deposit. It is put in place to defend the lender against default. However, the cost of this is dependent on the lender.


4 – Legal Fees
These involve the fees of your conveyancer or solicitor to transfer your new property from the seller to you. These fees vary across firms so you need to ensure the exact costs.


5 – Loan Provider Fee
Your lender may charge a series of fees, some being an establishment fee, settlement fee or service fees. This doesn’t always happen however, it is best to be prepared than be surprised at this cost.


6 – Rates
After settlement, you will now be accountable for the rates applicable to your property. This includes the council rates and body corporate fees (applicable only to apartments).


7 – Moving Fees
Finally, your moving costs! You want to settle in to your new home – make sure you allocate budget to move your furniture!

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