Thinking about purchasing your first property? Before you dive straight in, there are a number of things you need to consider.
#1 The REAL cost of buying a property
It’s important to understand the upfront and ongoing costs when buying your first property. Often first home buyers neglect to understand the full cost of buying a property only to find they haven’t budgeted sufficiently.
Upfront costs include the purchase price, government fees, legal/conveyancing fees, building/pest/strata inspection reports, and moving costs. Getting professionals in for inspections might seem costly, but it is necessary to avoid nasty surprises down the track.
One of the bigger upfront costs you may have to pay is stamp duty or transfer duty. Find out how much you will need to pay using the calculators below:
ACT – Revenue Office: Calculators
NSW – Office of State Revenue: Calculator – for land and property transfers
NT – Department of Treasury and Finance: Stamp duty calculators
QLD – Office of State Revenue: Transfer duty calculator
SA – RevenueSA calculator: Stamp duty on conveyances
TAS – Department of Treasury and Finance: Property transfer duty calculator
VIC – State Revenue Office: Our calculators
Western Australia – Department of Treasury and Finance: Calculators
Ongoing costs include loan repayments, interest charges, council rates, utility costs, insurance, maintenance, and depending if you are leasing out your property – property management.
#2 Explore Government assistance options available to you
The First Home Owner Grant (FHOG) national scheme is administered by the states and territories under their own legislation. This means that eligibility will differ depending on where you live, so it’s best to contact your state revenue office to fully explore your options – http://www.firsthome.gov.au/
You may also be eligible for further concessions on items such as stamp duty, so it’s necessary to do your research.
#3 Research the locations you’re interested in
Buy with your head, and not your heart. As important as it is to love your home, you also need to seriously consider the practicalities of your property. Things you need to investigate include:
- Property prices in the suburbs you’re interested in
- Distance from family, friends, and work
- Rental returns and vacancy rates if you’re renting your property out
- Off-street parking and local amenities, such as schools, shops, and transport
- Whether you’ll need to renovate and if you have the extra funds available to do this
- Price growth potential in the suburbs you’ve shortlisted for capital gains purposes
- Proposed developments in the area in case they impact the value of your property.
#4 Think about your finance future
So you’ve saved enough to put down a deposit and take out a loan, but that doesn’t mean you will automatically be able to service your loan in five years’ time. Is your job secure? Are you considering reducing your work hours or going back to study? It’s essential to think forward to make sure you can continue to repay your loan.
#5 Get your finances in order EARLY
It’s a good idea to have your loan pre-approved so you know exactly what you can borrow. You’ll also need formal approval closer to purchasing and to have your deposit ready, or you may miss out. When is the right time to talk to a mortgage broker? – it’s a lot sooner than you may think!
While some lenders will offer loans if you have saved less than the usual 20 per cent deposit, being able to show a record of good saving habits will aid in getting your loan approved.
Talk to Nicky Turano at QED Finance Solutions about applying for pre-approval on the right type of loan. Nicky can also help you find out what you can afford in terms of repayments.
Call Nicky Turano today on 0403 124 345 or email nickyt@qedfinance.com.au
