How much does it really cost to buy a home? Have you factored stamp duty, legal fees and pest inspections into your budget?
There’s so much about home ownership that nobody ever tells you. Let’s clear a few things up.
Stamp duty, also known as transfer duty is a one-off, state-based tax so it varies according to the state or territory where you buy. Stamp duty is calculated based on the price you pay for your home. The good news for first home buyers is that — in addition to the First Home Owner Grant — you may be entitled to valuable savings on stamp duty in some states. Take a look at Aussie’s stamp duty calculator to know how much you will pay on your first home. Some lenders will let first home buyers borrow money to cover the cost of stamp duty. If this sounds like you, it might be a good idea to talk through options with your local Aussie Broker.
When you buy your first home, the property will need to be formally transferred into your name. This process is known as ‘conveyancing’ and calls for some legal expertise. Just like reviewing the contract of sale before you sign it, you might want to think about paying a conveyancer or a solicitor to do this for you — the peace of mind can be worth the expense.
Conveyancing costs can vary, so think about shopping around and enquire about the fee before you commit to using a particular conveyancing firm or solicitor.
The last thing you need is to buy a home with dodgy building work or a serious pest problem. In addition to doing your own inspections before purchasing a home, you should organise a professional pre-purchase pest and building inspection. To find a service near you, search for “pest and building inspections”, seek reviews and contact a couple of providers to compare prices.
Your first home is likely to be your biggest financial asset, so it worth protecting your ability to keep up with loan repayments through mortgage protection insurance. This covers your ability to meet your loan repayments if you get sick or lose your job.