“What! Hidden Costs?” If You’re a First Home Buyer Relax, Here's What You Need To Know Ahead of Time…

7 November 2019

Buying your first home is a big deal. It’s exciting and daunting at the same time - a melting-pot of emotions. For those property ‘newbies’, it’s important to know that the purchase price isn’t the only associated cost when buying your first home (although that would be nice). Unfortunately, there are other expenses that come into play when buying your home. So, before we start popping the champagne bottles, giving you hugs and handing over the keys, there’s a few things you should know about the hidden costs and what you may need to put aside ahead of time.

  1. Deposit - You’ll need to come up with a 10-20% deposit to secure the home loan.
  2. Stamp Duty - jump online and look up Stamp Duty Calculator Australia. Depending on a few factors, you may be exempt from stamp duty.
  3. Conveyancing & Legal Fees- this is all dependent on the amount of work, so put aside approx. $1,000 - $3,000 to be safe.
  4. Lenders Mortgage Insurance (LMI) - If you borrow more than 80% of the purchase price then you will need to come up with some money. This is to protect the lender if you can’t make your repayments.
  5. Building & Pest Inspections - It’s worth paying that little bit extra to ensure you’re not buying a property that will collapse in a heap. This should not be over looked and will give you peace of mind when you find the right property. A building and pest inspection can cost anywhere around $500 - $600 (combined).
  6. Council and utility rates: can vary but approx. $500 per quarter.
  7. A valuation of your home can cost a few hundred dollars.
  8. Home and contents insurance can cost around up to $1,500.
  9. Connecting utilities!
  10. Repairs and Maintenance - Imagine you’ve just settled into your new home and you come to find out the heating/cooling won’t turn on, or that the rangehood doesn’t work. Although it’s a nuisance, things like this do happen. Make sure you have funds to cover the repairs. Alternatively, if it's a new home you're moving into, check the maintenance period and warranty's provided by the Builder.

Everything adds up and as first home buyers, we don’t have that much cash up our sleeves. It’s important to ensure you’re one step ahead. Remember to plan and budget for these costs!