Last updated on November 20th, 2020 at 10:33 am
If you are about to jump into the housing market and buying your first home, you should be aware that there are plenty of hidden costs that you might not have considered. From stamp duty, lenders mortgage insurance, and sneaky fees, being aware of the hidden costs can help to ensure you have adequate savings and are organised for your big property purchase.
In this article, we explore the hidden costs you might run into as a first home buyer in Victoria and provide the essential information to ensure you are purchasing a property armed with the knowledge you require for a smooth property transaction.
The listed price for buying a new home in Victoria is one thing; the additional costs can wind up costing tens of thousands more than you might have ever expected.
In this article, we explore the hidden costs you should be aware of when buying your first home.
The price tag for a property is one thing, however, the hidden costs add up considerably, and you might want to ensure you budget for some of the expenses below in your first property purchase.
When you are buying a property, you can’t do without a conveyancing solicitor to help you arrange all the legal aspects of purchasing your first property. Often recommendations or word of mouth is the best way to find a good conveyancing solicitor. You should ask the solicitor to review your contract ahead of signing it and expect to pay fees of anything between $500 and $1500 for their service.
Another unavoidable cost when buying a first home in Victoria is the stamp duty for the property. If you would like to determine the land transfer / stamp duty for your first home, there are some great calculators available at the State Revenue Office Victoria website here. In many cases, first home buyers will have concessions available or even stamp duty removed for their first purchase, providing some serious savings for first time property purchasers.
When you put an offer in for your first home, and it is accepted, the next step is arranging a building and pest inspection from a licensed and registered provider. These reports will provide an overview of anything you might need to consider when buying your first home so you can make a clear decision on whether you want to proceed. If the report uncovers anything to do with the building or an issue with pests such as termites, you can then go back to the vendor should you wish to negotiate on price or pull out of the contract.
Each bank or financial institution will charge a home loan application fee if you are getting a mortgage. This is a one-off fee charged to set up the loan and could range from $500 to $1500. You will be made aware of the application fees when you chat with your lender, and you should be sure to take note so you can add it into your home loan budget and finance calculations. You should also ask your bank about transfer fees and mortgage registration as well to get a clear understanding of what you might need to budget for should you need this down the track as well.
Often one of the largest hidden costs for a first home buyer is LMI. The insurance is a one-off cost to the buyer of the property when the borrowed amount exceeds 80%. Each bank or financial institution has LMI calculators that help to provide the information you need to budget for LMI. Log onto your bank to calculate the LMI based on your deposit and the property purchase price to get a clear understanding of what you will need to pay.
On top of this, you will need to consider that when you are buying an existing home, you will need to pay the vendor for the council rates or utility rates owing or that have been paid until the end of the quarter. All of these calculations are arranged by your conveyancing solicitor and will be outlined towards the end of the property purchase process once the essential property searches have been carried out.
As a first home buyer, be sure to be informed about the hidden costs for your property purchases in Victoria
If you’re interested in finding out more about buying home as a first home buyer in Victoria, the friendly team from Achieve Homes are here to walk you through the process and provide essential information for first home buyers.
For Victorians buying your first home through to retirees exploring options for a custom home build, Achieve Homes offer a wide range of custom build options to suit every budget and building preference. To find out more, get in touch with the friendly team from Achieve Homes today and arrange a complimentary consultation.
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