When the hammer comes down on your first home purchase, the future is full of possibilities.
Whether you’re looking forward to quiet nights at home, hosting big family occasions, or raising your kids there – whatever you’re dreaming of – it’s an exciting time!
So, seriously, we’re not wanting to spoil the party. But to make sure you can truly celebrate your new home purchase, we’ve put together some helpful information about home-buying costs you mightn’t have given much thought to. Because after you hear ‘sold’, you don’t want any unexpected surprises.
What home loan fees will I be charged?
It’s a good question, although there’s no ‘one answer fits all’. That’s because it’ll depend on the type of home loan you take out, and the services you use.
Home loan fees can vary at different institutions, but at Bendigo Bank the only reason we charge home loan fees is to cover costs that we’ve incurred in preparing and administering the loan. And importantly, our customers only incur a fee for a service directly related to their specific home loan.
Home loan related fees can include an application fee; document preparation fee; settlement fee; and valuation and solicitor costs.
Speaking to your Bendigo Bank lender will ensure you’ll be fully aware of home loan fees that apply to your particular loan (and there might even be fee waiver promotions running to help you cut your costs).
Conveyancing – it’s a thing.
You’re likely to know about conveyancing if you happen to work in a bank or law firm. But if you don’t, you mightn’t be very familiar with it as a first home buyer.
Conveyancing deals with all the legal documents needed to make a home, legally, yours. It’s not overly complicated, but it’s an important cost to build into your budget.
You may be up for lender’s mortgage insurance
Lender’s mortgage insurance protects the lender against costs incurred if a customer defaults on (can’t or won’t pay) their loan. Whether you need to pay this insurance will depend on the amount of the deposit you provide.
As a general guide, having a deposit of 20% of the value of your mortgage will mean you won’t need to pay this insurance. However, if your deposit is less than 20%, you most probably will have to pay it.
What about government charges?
Stamp duty’s the big one. Whenever you buy property in Australia stamp duty is charged by the relevant state government and is based on the property’s purchase price.
However, the good news for first home buyers is that you’re likely to be eligible for a stamp duty rebate or concession, depending on the state you live in and the purchase price of your property.
Check out your relevant state’s State Revenue Office website to find out if you’re eligible.
Other government costs to be aware of include a Transfer of Land fee. This fee is charged whenever a property changes hands and will vary from state to state. A government Lodgement Fee will also apply to register these documents.
And don’t forget insurance
This one is never on top of anyone’s ‘thrilled to pay’ list. However most of us can see the sense in protecting our property, and its contents. And when you have a home loan, insuring your property is a condition of taking out the loan.
Your lender can give you a quote for insurance on your property, and also on contents, as well as quotes on any other insurance that you may need.
Given that buying your first home is a pretty big deal, you might even consider making an appointment to see a financial planner. They can help you work through your overall financial situation and assist in making the best possible decisions to maximise your financial future.
If you’d like to, you can make a free appointment with a Bendigo Bank financial planner.
Hopefully you’ll secure your first home at a price you’re really happy with.
Being aware of the ‘other’ costs – over and above the purchase price – will help ensure there’s nothing to spoil your party once you’ve signed on the dotted line.
Our mobile lending team will help with all parts of home lending and they come to you.