The Hidden Costs of Buying a Home

Are you a first home buyer with your heart set on purchasing your own home? The financial reality of buying your own home can be overwhelming, especially if you aren’t prepared for all the hidden costs that come with buying real estate. 

To help you budget properly, we have listed some of the most common hidden costs that first home buyers might not be aware of.

HIDDEN COSTS FOR HOME BUYERS

Government

There are a number of costs that will come down from the government if you’re buying property. The biggest cost you will face is Stamp Duty, which is a state levy on all property transactions and will fluctuate depending on where the property is and how much it is. First home buyers may be able to get a concession on stamp duty, depending on the state.

Next, we have a Property Transfer Fee, which is where you will be charged to transfer the property into your name. Last, there is a Mortgage Registration Fee, which is the fee charged for registering your mortgage on your new property.

Pest & Building Inspections

Another fee to keep in mind is that you will have to pay for Pest and Building Inspections. These can cost anywhere up to $1000 and are necessary for you to have a full understanding of the value and state of the property. If these inspections result in any issues, you will also need to fix any problems they reveal once you buy the property, which will likely cost you.

First Time Home Buyer Tips

Loan Application

When applying for your loan you will come across a number of hidden costs. First you have the Loan Application Fee, then Ongoing Fees throughout the loan application process. Other fees you will come across throughout the loan application process are Lenders Mortgage Insurance and Lender’s Property Valuation. The first is required if you need to borrow over 80% of the cost of the home, and the second is due to the lender valuing the property for themselves to ensure they aren’t loaning you more than the necessary amount.

Conveyancing

A good conveyancer is an important person to have on your team for first home buyers. They will handle the legal side of your investment and will be able to talk you through all of the above hidden costs and guide you through any issues that pop up along the way. They themselves will charge a Retainer for their services, so shop around to find the right conveyancer for you.

For more helpful information for first home buyers, check out our blog.