There is so much to think of when buying a home.  Loads of searches, meeting agents, inspecting properties, back to searching and more searching, then more inspections and so on.  It seems never-ending!  But in amongst all of this busyness, is also a stack of things that many buyers forget.

1. Loan pre-approval

It is often neglected right up until the day before the Auction.  A typical loan pre-approval can take a few days to complete.  I liken it to going shopping knowing how much money you have to spend: if you don't have loan pre-approval, you can't possibly know how much you can afford to spend, and you are not in a position to purchase.  It's free to engage a mortgage broker and get pre-approval.  It's a bit of paperwork for the reassurance of knowing your budget.

2. Selling costs

People who need to sell before they can buy, often don't factor in the costs of selling and subtracting those expenses from the sale price.  Costs include agent's commission, marketing and home styling, to name a few

3. Stamp duty

Stamp duty is a tax levied on most property purchases in Australia.  The amount will vary, but is generally around 4% in NSW.  It is paid on - or just before - settlement.   Your mortgage broker will factor stamp duty into your budget. 

4. Costs of moving in

Some homes require some minor renovations or modifications before you can move in - these costs need to be factored in.  There are removalist costs, perhaps cleaning costs, perhaps storage costs and of course the cost of your time.

5. Lender’s Mortgage Insurance

If you’re borrowing more than 80% of the house’s value, you’ll usually need to pay Lender’s Mortgage Insurance (LMI).  Your mortgage broker will advise you.  It is generally added into the mortgage, so it is not a separate cost, but you will pay interest on LMI if it is included in your loan, so you will end up paying even more in the long run.  it is still; a great idea to have LMI if it means you can get into the property market, or if it means that you may have a second deposit available for another property purchase in the near future.

6. Conveyancer / property lawyer's fees

These can be around $2,000 for reviewing the contract for sale/purchase and for advocating for you through your property purchase.

7. Professional representation from your own buyer's agent

A stitch in time saves nine.  While there is a cost associated with a buyer's agent service, it will generally save you much more in terms of negotiation of the purchase price, avoiding costly mistakes in your property purchase, preserving your mental and emotional state and of course freeing up your time for other income-generating pursuits (or simply having fun).

If you need professional representation through your property purchase experience, contact me today.