What are the costs in buying a home?
- Deposit
- Lenders Mortgage Insurance
- Loan Application Fee
- Legal & Conveyancing
- Government Fees
- Insurance
- Inspection Fees Utilities
- Council Fees
- Stamp Duty
What benefits am I entitled to as a First Home Buyer?
What's my budget?
The first place to start is setting a budget. This needs to be as realistic and accurate as possible so you know where you stand financially.
Your budget should take into account what you earn and spend every month right down to the last little details. You will also need to include anything you owe, like personal loans, credit card payments or higher-purchase agreements. Remember, if you're currently renting, you will be able to put what you are paying in rent towards your new home instead!
Once you know your budget, stick with it. This will really help you to comfortably afford repayments while getting the best out of your new home.
If you're not sure where to start, click here to use our handy online budgeting tool.
What are the costs in buying a home?
There are many costs that come with buying a home. Some of these are more obvious than others, such as a 'deposit'. However, it's important to know all the costs involved upfront, to avoid any unwanted surprises along the way.
Generally it's a good idea to save around 5 - 20% of the property value as a deposit. The greater the deposit, the less you will have to borrow (and the lower your repayments will be), but it also depends how soon you want to be in your new place. New customers may borrow up to 90% of the property value. Existing Bankwest home loan customers with good conduct may borrow up to 95% of the property value (conditions apply).
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If you are borrowing over 80% of your new home's value, generally you will be required to take out Lenders Mortgage Insurance (LMI). This protects the bank if you can no longer pay the mortgage and default the loan. At Bankwest, Lenders Mortgage Insurance is charged as a once-only premium, or can be added to your loan so that you don't have to save for the fee upfront.
If you don't want to pay Lenders Mortgage Insurance, in certain cases Bankwest can allow your parents to act as a guarantor instead (for example, if their additional security is an investment property). Talk to one of our lenders to find out if you are eligible.
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There is a standard, upfront establishment fee which your Bankwest consultant will advise you of. This covers the preparation of loan application documentation, legal fees for standard mortgage preparation and one standard valuation.
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You will need to engage the help of a professional to purchase your property for you.
We suggest you check with the Settlement Agents Supervisory Board website for details of suitable Conveyancing providers, or ask your Real Estate Agent for assistance in selecting and appointing an agent.
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There are some government fees which will be charged depending on the price of the property (for example, land transfer fees and other taxes).
Be sure to fully understand the charges that apply to you - your Bankwest consultant will help you with this.
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A home is probably the biggest purchase you'll ever make so you need to make sure it is well protected. We recommend you take out home building and contents Insurance which covers the cost of damage in the case of fire, burglary and certain other events. Your Bankwest consultant can arrange a quote through Vero Insurance.
Remember, if your Deposit is less than 20% of the property value, you will also need Lenders Mortgage Insurance as outlined above.
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It's really important to make sure you know what you're buying. That's why we recommend two forms of inspection that should be carried about before settlement:
1. Building Inspection - checks for structural problems.
2. Pest Inspection - ensures the house is free of pests and termites.
Shop around to compare prices and make sure the company you choose is fully licensed and insured. If you're buying at auction, another interested party may have already commissioned inspections which you may be able to get a copy of at a discounted price. Speak to the Real Estate Agent for more details.
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- Utility Connections
Remember that you will need to arrange the connection or transfer of utilities such as water, gas and electricity. There can sometimes be connection or transfer fees so make sure you know what they are up front.
Contact your local council to confirm any fees that may apply in your area.
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Stamp duty fees can vary in each state so you'll need to be aware of the cost that this will add to your property. For most property purchases, the state government will charge you Transfer Stamp Duty payable at settlement of the loan (when the property changes ownership).
In some cases, First Home Owners may be eligible to have the stamp duty waived or discounted. Visit the Office of State Revenue website for your state to find out if this applies to you.
Click here to calculate the stamp duty on your property.
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What benefits am I entitled to as a First home Buyer?
The Federal Government's First Home Owner Grant (known as FHOG) is a tax-free grant to help people buy their first home. If you're eligible for the grant, Bankwest will process the government forms for you and even arrange for your grant to be available at settlement!
You may also be entitled to one of many government rebates for first home buyers. These rebates vary from state to state and are usually in the form of stamp duty rebates or exemptions. For further information regarding rebates, click on your state below, or speak to your Bankwest consultant.
WA - www.dtf.wa.gov.au
NSW - www.osr.nsw.gov.au
VIC - www.sro.vic.gov.au
ACT - www.act.gov.au
QLD - www.osr.qld.gov.au
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