The unexpected costs of buying a home

<p class="para">You’ve saved your deposit, found your dream home, organised your finances and are ready to make an offer. It’s a big decision - quite possibly the largest purchase of your life. Before you jump in, we’ve put together this blog to help you best prepare financially for your new home purchase – without any surprises.</p>

<p class="para">As a soon to be new-homeowner you may not be aware of the range of additional costs that can come with buying a home. So, before you sign a contract of sale or make an offer, check out these often hidden, out-of-pocket costs that you may also be up for. As you’ll see there are quite a few costs associated with this purchase! Here’s our list of often unexpected costs:</p>

<ol class="single-blog"><li><strong>Government Costs.</strong> There is a range of costs including:<ul><li>Stamp duty which is a state levy imposed on all property transactions and is one of the biggest costs you will face when buying a home. The amount you have to pay in stamp duty will depend on where you buy and how much you pay for your property. Some states offer stamp duty concessions to first home buyers.</li><li>Property transfer fee is another state government charge to register your name on the title of the property. Some states and territories may charge a set fee, while others are on a sliding scale.</li><li>Mortgage registration fee which is a state government charge for registering your mortgage on the title of your property.</li></ul></li><li style="margin-top: 30px"><strong>Legal Fees.</strong> You’ll need to hire a solicitor, or conveyancer, to review the contract of sale and to assist in the transfer of the legal title of a property into your name. The amount you spend on their services will depend on the location and the complexity of the terms of sale. Don’t forget to ask the conveyancer for a list of fees for searches involved in the process, like title searches and various council certificates.</li><li style="margin-top: 30px"><strong>Inspection Certificates.</strong> As part of the conveyancing process, you need to conduct pest and building inspections which can cost thousands depending on the company you go with and where you are buying. While this may seem like a big expense, it is a small amount to pay for peace of mind as it will highlight any structural faults or insect infestations.</li><li style="margin-top: 30px"><strong>Utility Fees.</strong> As part of the conveyancing process all outstanding council and water rates and strata or body corporate fees (if buying a unit) will be calculated and the cost split between the buyer and seller in proportion to the length of time each party owns the property during the rates period. In addition, you may incur connection fees for gas, electricity, internet and other utilities.</li><li style="margin-top: 30px"><strong>Insurance.</strong> Most lenders will require you to have an insurance policy in place prior to settlement. This can either be home and contents or landlord's insurance. Paying insurance annually is always cheaper, but if it’s easier on your cash flow you could opt for monthly costs instead. The price will vary on the location, type of policy and the amount insured.</li><li style="margin-top: 30px"><strong>Loan and Mortgage Costs.</strong> Most lenders will charge a range of costs such as:<ul><li>Loan Application or establishment fee - charged by the lender when applying for the loan.</li><li>Lender’s mortgage insurance - if you’re borrowing more than 80% of the value of the property’s purchase price, you’ll have to pay LMI as a one-off amount or it can be added to your loan.</li><li>Property Valuation - most lenders require a property valuation to confirm the valuation of the property prior to purchasing. Often it is arranged by the lender but is an additional cost that you’ll incur.</li><li>Loan fees - also known as ongoing service fees or administrative fees and charged monthly or yearly on your home loan. It pays to check the product information for exact costs</li></ul></li><li style="margin-top: 30px"><strong>Moving Costs.</strong> Unless you have a truck or large car or a friend with a van or ute, you’ll like to have to pay a removalist service to help you with your move and depending on the size of your home and how much stuff you have, it can end up costing anywhere from a few hundred to a few thousand dollars.</li><li style="margin-top: 30px"><strong>New Furnishings.</strong> Moving into a new home can be super exciting. No doubt you’ll be ready to decorate and furnish it to your own taste and style. Make a list of the things you’re going to want to change or improve and estimate the costs you’ll incur to do that. That way you can work out your budget and establish your priorities. Remember if you don't have the cash for it all, you can save towards these as new goals. There’s also no rush, now that it will be your home, you’ll have plenty of time to make it your own!</li><li style="margin-top: 30px"><strong>Unplanned or Emergency Costs.</strong> Even the best plans sometimes don’t go according to plan. Things can break, or need replacing, fixing or repair. Things we haven’t thought of or have forgotten can often pop up. Having a buffer can help to meet any unplanned or unexpected expenditure.</li></ol>

<p class="para" style="margin-top: 20px">The actual costs that you may incur will depend on the location, value and type of house you’re planning to purchase. You may incur fees and charges from different state and territory governments, local councils, banks, lenders and other financial organisations as well as other service providers.</p>

<p class="para">We love seeing our customers using Blossom to help save for their own dream home! We hope this list helps you on your home buying journey!</p>

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