If you’re a first time home buyer in Perth, you’re probably aware that you are likely to need a substantial amount of savings before you’ll be able to purchase your first home.
But do you really know just how much buying a house will cost you? Let’s take a look at the real cost of buying a house and what you need to budget for when you’re house hunting.
Everyone knows they need a deposit but how much will depend on your budget and lifestyle expectations. How much can you really afford to save? What kind of mortgage interest rate do you want – the bigger your deposit the better the interest rates you can expect. Many lenders require anywhere between 5% and 20% as a deposit.
Stamp duty is payable in every state and the rate will vary depending on your circumstances and the purchase price of your home (or land if you are building). There are thresholds for stamp duty and if you are under them you won’t pay stamp duty – however this is not very common as many homes are above this low threshold. Find out more about stamp duty rates here.
When you buy a home, you need to hire a conveyancer to take care of all your contracts and paperwork. They can cost anywhere from $800 to $2000 depending on the complexity of your purchase.
Building & Pest Inspections
Always get a building and pest inspection. A few hundred dollars spent now on these checks could save you thousands in the future if anything is picked up on the reports. These can cost from $300 to $600.
Mortgage Registration Fees
This is to lodge your ownership with Landgate in WA – currently the cost is $168.70.
Mortgage Establishment Fees
Lenders will charge an establishment fee for setting up your mortgage. This ranges from lender to lender but could cost up to $1000.
Lender’s Mortgage Insurance (LMI)
If you don’t have a big enough deposit, your lender can insist on adding lenders mortgage insurance to your mortgage. This can end up costing thousands and will depend on the size of your deposit.
Your lender may also require proof of building insurance before they will allow the mortgage to be put in place. This can cost a few hundred dollars a year, or more depending on what levels of cover you choose.
Once you have completed the purchase process, you’ll be excited to move into your own home. Most people hire removalists or a truck to move all their belongings so make sure you’ve got money put aside for this.
If your property isn’t currently connected to gas, electricity, phone, internet or things like Foxtel, you may face set up fees for getting these utilities connected. Check what will be payable before you move and budget for these extra costs.
Here at LUDA Financial Solutions, our mortgage brokers in Joondalup can help you budget for every cost you’ll incur when you buy your first home. Book an appointment with our Perth mortgage broker today and find out exactly what you will need to save before you can buy your own home.