THINKING of buying your first home? Then be aware that the cost of the home you want to buy is boosted by the many extra costs encountered throughout the buying process. And it is important that you factor in this added expenditure when budgeting to buy a new home. So, being prepared can save a lot of heartache and frantic worry trying to get into your first home.
Most people are aware that securing finance for a home loan to fund the purchase automatically brings with it upfront and ongoing fees. It is advisable to ask the lender or mortgage broker to list all the fees of the loan you are considering and when they are payable before signing any agreement.
Fees which may be included are application fees, valuation fees, establishment fees, service fees, transaction fees and exit fees. Lenders may also require you to take out mortgage insurance and while you are paying for it, the insurance actually insures the lender against any default on repayment. However, sometimes this is a requirement for you to get the home loan.
When taking out a home loan, ensure the fee structure suits your situation and budget. Don’t be afraid to ask the relevant questions to ensure you know exactly what’s on offer.
Stamp Duty Concessions
Stamp Duty can add a substantial amount to a property purchase but there is good news for First Home Buyers. In Queensland, First Home Buyers can benefit from a $8750 Stamp Duty Concession on properties up to $505,000, as of July 1, 2012.
The 2012–13 Queensland State Budget also introduced the first home owner construction grant (FHOCG), administered under the First Home Owner Grant Act 2000. The grant is available to first home owners who will be buying or building a new home. This grant of $15,000 is available for: Contracts to buy a new home (including off the plan) dated on or after 12 September 2012; Contracts to build a new home dated on or after 12 September 2012; New homes being built by an owner–builder where the date the foundations start to be laid is on or after 12 September 2012.
A new home is a home that: has not been previously occupied as a place of residence; has not been previously sold as a place of residence; or is a substantially renovated home (in certain circumstances).
The $15,000 grant will not be available: if the contract replaces an existing contract made before 12 September 2012; for new homes where the contract is dated before 12 September 2012; for owner–builders where the date the foundations start to be laid is before 12 September 2012; or for established homes.
The FHOG eligibility requirements also apply to the construction grant, including a cap amount of $750,000.
You may still be eligible for the $7000 first home owner grant for established home purchase contracts dated before 11 October, 2012. For further information http://www.osr.qld.gov.au
Conveyancing and other costs
Legal costs can vary from a few hundred dollars up to a few thousand, depending on the complexity of the purchase and value of the property.
Building and pest inspections are also a good idea and are sometimes a condition of the loan approval. Regardless, it is wise to conduct these inspections for peace of mind. The cost varies but is usually between $250 and $500. You are advised to seek quotes to get the best price and ensure the company has a good track record.
SB Realty Pty Ltd was founded by Shirley Broun, who spent much of her working life as a journalist, including several editorships and a successful 10 year period as Proprietor and Managing Editor of her own national award-winning publication in the entertainment industry. [Read More…]
