5 Hidden Costs When Buying a New Home
There are many costs you need to factor into your calculations before you take the plunge towards buying a home.
When planning to purchase a home, many people save just the amount they need to make a deposit. In fact, there are several hidden costs that you should include in your calculations when buying a house.
Building inspection. Before finalizing your purchase or bidding at auction, it is recommendable to receive a building inspection to determine if the home has any faults or defects in its structure, electrics, plumbing, and ventilation. Most qualified inspectors charge around $600, but it is well worth the expense.
Stamp duty. In Australia, most property buyers must pay a state government tax called stamp duty, no matter whether the building they are purchasing is residential, retail, or commercial. If you are a first time buyer, you may be able to pay stamp duty at a reduced rate depending on where you live. But normally allow for 5% of the purchase price for stamp duty and other government charges and conveyancing costs.
Mortgage insurance. If you borrow more than 80 percent of your property value, you will usually have to pay mortgage insurance. This one-time premium covers lenders if you default on your loan. At 0.5 to 2 percent of your mortgage, the more your borrow, the more costly the insurance will be.
Moving costs. Everyone knows that they will have to move their possessions from their old home to their new, but few people take this expense into consideration. If you hire a truck without a crew, you can expect to spend between $100 and $300. However, hiring a professional company can cost up to thousands of dollars, depending on the amount of belongings you have.
Utility connections. This is a particularly expensive consideration for
new home owners who have never had an account with gas, electricity, and phone companies before. Each provider may charge a bond of a couple hundred dollars. Even if you already have an account, expect to pay between $60 and $100 per service.
We understand all the difficult calculations and decisions that come with buying a house. Make the process a smooth one by contacting us for more information about how we can help you. We can help with building inspections, finance and utility connections. Even if you don't end up buying from us! Call us on 1300 723 615