Understanding the cost of your first home

Anthony Radford | Bendigo Weekly | 30-Aug-2011 4.16pm

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Understanding the cost of your first home
First home buyer numbers have decreased recently as interest rates have risen, assistance has dropped and prices have increased.
This makes it even more important when working out your budget to be aware of the many costs associated with purchasing your own home; after all, you want to have as much money available for the actual property.

Financial assistance
In addition to the $7,000 first home owner grant, those buying or building a new home can access thousands more through the bonus scheme.
Check with the State Revenue Office to ensure you understand the eligibility requirements.

Borrowing costs

Before beginning the search for a new home, you should ascertain how much you can afford to borrow then obtain loan pre-approval from the bank.
When combined with your savings, the amount you borrow has to cover more than just the cost of the property, such as the loan establishment fee, mortgage insurance and stamp duty.
Fees will vary from lender to lender, so be prepared to shop around for the best loan to suit your needs.

Stamp duty
In Victoria, stamp duty on a property is currently as high as six per cent, depending on the value of the property.
However, the State Government has cut stamp duty by 20 per cent for first home buyers.
Valuation report It may be worthwhile obtaining an independent valuation report on a property to indicate its current market value. The valuation must be conducted by a Certified Practising Valuer.

Legal costs
Obtaining assistance and advice from a solicitor will help you navigate the relevant contracts.
Fees are negotiable, so shop around and compare rates.

Building and pest inspection reports
Undertaking such a report may save you thousands of dollars in the future and will highlight the need to perform work on the property and make allowances in your budget for it.

Enzo Raimondo
CEO REIV
b.Entertained

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