Buying your first home is both exciting and daunting at the same time.
So, where do you start?
How much do you need to borrow?
Knowing what you can afford to borrow is really important. You may have a home loan, but you still want a life.
Make a list of your current and future needs and expenses.
Don't forget, you never know how your health, income and personal circumstances may change. So just because you may be able to borrow a certain amount of money, it doesn't mean you should.
How much do I need for a deposit?
Generally you need a deposit of at least 20% of the purchase price of the property. Any less than this and you'll need lenders mortgage insurance.
Stamp duty is the state government tax on mortgage documents and the property. The laws and amounts vary from state to state. For more details or to work out stamp duty costs in your state, visit the relevant websites below, or use the stamp duty calculator.
- ACT Revenue Office
- NSW Office of State Revenue
- Northern Territory Revenue Management
- Queensland Office of State Revenue
- Revenue SA
- Tasmanian State Revenue Office
- Victoria State Revenue Office
- Western Australia Department of Finance State Revenue
Conveyancing is the legal process of transferring ownership of a property from one person to another. You can use a conveyancer or solicitor to do this. The main difference is a solicitor can give you legal advice, while conveyancers are generally cheaper then solictors. You need to budget for a title search to verify ownership and type of property.
Lenders Mortgage Insurance
When you borrow more than 80% of the property value you will need lenders mortgage insurance. Lenders mortgage insurance covers us if you default or do not repay your loan, i.e it's insurance for the lender, not the borrower.
Building and home and contents Insurance
As soon as the contracts are exchanged you need to organise building insurance. If you're an owner occupier, you might want to consider contents insurance as well.
Here are just some of the costs you need to include (it's a great time to have a garage sale and save on some of the moving costs!):
- Extra furniture
- Utilities connections
Strata searches and building and pest inspection costs
First Home Buyers Grant
Administered by the Office of State Revenue WA.