What costs are there when I buy my first home?
When buying your first home, you need to allow for additional costs that are over and above your deposit.
Your deposit is there to provide the bank the comfort you have “some $$ in the game” or hurt money as some people call it. So on $400,000 for a 10% for example is as $40,000 deposit. The mortgage insurance premium can be added to the loan or paid for out of your savings. Most of our first buyers end up adding the mortgage insurance to the loan so they do not have to contribute so much. The mortgage insurance costs vary depending on the Loan value ratio and the loan amount. For example – a loan with a 15% deposit will be more expensive to insure than a loan with a 19% deposit as the risk to the bank is higher with less deposit from the client. Other costs include – state government stamp duty (this is currently waived for purchases under $500,000 in QLD for first home buyers), government registration fees and title fees. Pest & Building inspection cost is normally around $500-$600 and legal costs which can vary.
Depending on the solicitor or conveyancer firm this cost will be between $1400-$1800. If you have never bought before, I suggest you engage the services of a firm that will be more hands-on as there is a lot of paperwork that needs to be completed along the way. Also, some firms charge a fee then add searches and extras to that fee. We like to work with firms that have a flat fee model – which means that you know what you will be paying from the outset. We have had clients who shopped for a “discount” or “1800 style conveyancer’s” who yes had cheaper prices, but they got let down and made the process unnecessarily stressful.
Every loan set-up is different. And the application to set a loan up will vary from bank to bank. Some have zero set-up fees, some have settlement fees, some charge valuation costs some don’t.
Your financial situation, deposit amount and type of loan set-up that will best suit you now and into the future – will determine what your application will look like.
We provide a funding summary which fully details your own bespoke set-up. That way you can budget accordingly.
Get in touch to find out what yours will look like.
PS: We have relationships in place with local businesses we trust in both Pest & Building and Conveyancing. We would be happy to provide you details on request.
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
