Buying Your First Home

BUYING YOUR FIRST HOME

Buying your first home is both exciting and daunting at the same time.  So, where do you start?

 Home much do you need to borrow?

Know 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

We recommend you see a finance broker who will assist to get you best loan available and give you indicative figures (there is no cost to you which you use the service of a finance broker).

 Deposit?

Generally you need a deposit of at least 20% of the purchase price of the property.  Any less than this and you could need lenders mortgage insurance.  Your finance broker will be able to give you indicative figures.

Stamp duty?

Stamp duty is the state govt tax on purchase of property.  First Home Buyers are exempt from paying stamp duty up to

– purchasing a home up to $430,000 = exempt,  % applies thereafter,

  • vacant land = exempt up to $300,000 if you have signed building contract prior to settlement,  if a building contract is not signed then the general rate is payable at settlement but if you build your house within five years, stamp duty paid at settlement is reimbursed to you from State Revenue.

First Home Buyers Grant thresholds and eligibility is complex – please see www.finance.wa.gov.au – first home buyers fact sheet for details and facts.

Conveyancing  is the legal process of transferring ownership of a property from one person to another. The legal document prepared by your conveyancer is called The Transfer of Land and it the one document that requires original signatures of both parties.  For a seller, it involves the arranging for discharging of mortgage/s, and preparing to hand over the property at settlement with all electrical , plumbing and gas amenities in working order. For the purchaser It may involve building and pest inspection reports and enquiries with local authorities and strata management . Conveyancers also conduct seller identification

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. Contact you finance broker to get an indication of how much mortgage insurance you may be liable to pay as it can be $10,000 or more.

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.

Moving costs

Here are just some of the costs you need to consider: Removalists, cleaners, Extra furniture, Utilities connections. It’s a great time to have a garage sale and save on some of the moving costs!

Settlement Agents’ Scale of Fees (set by the Govt.)

Fees for Purchase Price $50,000 – $64,000

Fees for Purchase Price $65,000 – $5,000,000

Source: AICWA website http://www.aicwa.com.au/cost-buying-home  http://www.aicwa.com.au/first-home-buyers