Deposit – As a general rule, an owner occupier will require a minimum 5% of the property purchase price as a deposit. The bigger the deposit you can put together, the better as it reduces your home loan size and can eliminate the need to pay Lenders Mortgage Insurance (LMI).
First Home Save Accounts – A first home saver account can only be used when you are saving to buy or build your first home. Each year the federal government will make a 17% contribution on the first $5,500 you deposit each year. This means that if you deposit $5,500 in one financial year, you will receive $935 from the government.
Grants and concessions – First home buyers are entitled to a $7,000 federal government grant. In Queensland they are also exempt from paying stamp duty on the purchase price of new homes up to $500,000.
Bank Fees and Charges – It’s a highly competitive home loan market so shop around for a mortgage with a lower interest rate for a variable or fixed rate home loan. A lot of lenders now are waiving establishment fees, saving as much as $600, as well as first year package fees of $400.
Building and pest inspections – These cost about $450 and are an essential part of any property purchase. The report covers any structural problems with the property and infestations. They can be a deal breaker.
Rates and water – Adjustments for these are done close to settlement and can catch you out if you haven’t allowed for them. The real estate agent should be able to tell you when rates are due and provide a rough idea of how much to set aside.
Budgeting – Prudent money management when you have a mortgage can lead to benefits such as investment opportunities and faster loan repayment – which can eventually lead to an increase in your disposable income and your equity.
Source: Priority Lending
