Browse Forums Home Finance 1 Dec 11, 2010 3:11 pm My first post on these forums after viewing them for some time. My brother and I are planning on purchasing a house together sometime early next year and I am just doing a bit of research to understand things better. We have created a budget for ourselves and are looking at purchasing a house around the 300k mark and we have a 20 percent deposit saved and are continuing to save. What surprises are we likely to come across, what did you not consider when buying your first home? Did you go through a mortgage broker or straight to a bank? Can you suggest any information worth reading about the whole process? What tips do you have? Thanks for any replies. Re: First Home Buyer Questions 2Dec 11, 2010 6:27 pm A few things we've found that we didn't need to pay for when renting: - sewerage and water bill - rates - building insurance (which was a required expense by the credit union arranged in advance of settlement) Our veggie bed thread: viewtopic.php?f=19&t=38476 Re: First Home Buyer Questions 3Dec 13, 2010 9:34 am Just a few tips:
Is there anything in particular that you need advice with? Re: First Home Buyer Questions 4Dec 13, 2010 3:27 pm Don't forget stamp duty (or are you getting the FHOG). Will you both live in the house? If not there are tax implications. Have you made a plan? eg How long you'll keep it? What happens if one wants to sell etc. You need to consider all options for the future. Things can go badly if not. Check that you are both on the same page with regard to the property and what each plans to contribute and what each hopes to get out of it. Re: First Home Buyer Questions 5Dec 13, 2010 8:52 pm Thanks for the replies so far has been helpful. We are eligible for the FHOG as far as I'm aware. What are the benefits of using a mortgage broker versus going straight to a bank. How does the process work you go to a bank/mortgage broker get pre approved, then do u make an offer or go to the bank and say I want to buy this block of land or this house. What are the benefits or downfalls of buying an existing house or building a new home. Re: First Home Buyer Questions 6Dec 13, 2010 10:13 pm JMatthews What are the benefits or downfalls of buying an existing house or building a new home. Building a new home is much more complex than buying an existing house. With regards to home loans, building a new home involves a few extra things. Some of these are: - you will need two loans, one to buy the land and a construction loan to build the house. - your borrowing power will likely be lower if you are renting during the construction. - you will be repaying the land loan before the construction has even started, which may affect your budget. - there are more fees, perhaps (setting up a construction loan, fees for construction inspections by the bank) Good luck with your project, be it buying existing or building a new home! DKP. Re: First Home Buyer Questions 7Dec 13, 2010 10:21 pm Have you done research on where you are looking to buy/live...? $300k can't get you much now days Re: First Home Buyer Questions 8Dec 13, 2010 10:53 pm a good mortgage broker will save you time. Different banks have different criteria for lending so a broker will know which bank has the best rates and is more appropriate to your circumstances. We used a very good broker and it took all the guesswork out of it, he knew which banks would lend us what we needed and which wouldnt. Once you know how much you are pre approved for, you can start house hunting (you would still make an offer "subject to finance" but if your broker has done a good job of selecting banks and nothing drastic has changed you shouldn't have any problems. there are additional expenses to owning your own home to take into account also, things like council rated and water rates, repairs and maintenance but as long as you don't stretch your finances too thin then you will be ok. Re: First Home Buyer Questions 10Dec 14, 2010 7:42 am Don't forget to include conveyancing and additional bank fees into your calculations also! Building on 1 1/4 acres Land settled 8th Dec 2010 / Received preliminary plans from designer 14th Dec 2010 / Received final plans from designer 17th Feb 2011 / Currently waiting on builder quotes.... Re: First Home Buyer Questions 11Dec 14, 2010 8:52 am What are the rough costs for conveyancing and additional bank fees. Can anyone recommend a good mortgage broker? We are still deciding whether to purchase an existing house or build our own. Just as an example if building our own a company says the cost of building it is $150k what extra costs are there? Re: First Home Buyer Questions 12Jan 15, 2011 8:49 pm Going through processs of buying a block of land at the moment just out of Sydney. Had a look at the SDR website however a bit confused. As are buying land only first then building in 6 to 12 months how does it work. Do I still have to pay stamp duty? Deposit on land 08/01/2011 Contract signed 20/02/2011 Settlement - 07/07/2011 Re: First Home Buyer Questions 13Jan 19, 2011 3:52 pm In Victoria you pay stamp duty on the land, not on the house (since it isn't built). You will also need to pay land tax at settlement - although this might not be a large figure, it could come out to be a couple of hundred dollars or so you weren't expecting. Prior to settlement the vendor's solicitor will send your conveyancer the 'statement of adjustments' which will essentiall outline all the money payable at settlement. This might not arrive until about two days before you settle, so it can be a bit of a guessing game. If you are buying into an estate, you can ask those who have settled before you what they paid as an indicator (and this forum is great for that). Quote: What are the rough costs for conveyancing and additional bank fees Figure up to $1,000 for straightforward conveyancing. A good broker will crunch the numbers regarding the full cost of a loan in relation to added fees - i.e. what will be due upfront and what is ongoing. These days most people go for loans with no ongoing monthly fees - in fact do your homework on this one, since how you structure your loan will make all the difference. Once again, a good broker can walk you through best-practice. In the absence of word-of-mouth, many franchises such as Mortgag3 Choice have managers of the year/month awards etc, and these can be a useful resource. Quote: Just as an example if building our own a company says the cost of building it is $150k what extra costs are there? With various upgrades which give a really decent finish (assuming single storey with $150,000) you might be looking at an axtra $50,000 min, plus maybe an extra $10,000 for a souped-up version. Depending on available promotions, what sucks up the money is any nasty discoveries regarding site costs, choice of flooring, any cooling units, your electrical consultation will also chew up around $5,000+, any additional wow-factors such as raised ceilings (which look great), extended rooflines for outdoor rooms, concrete driveways and paths (recommended) - even down to what sinks and styles. That upgrade to turn the single shower with the marbletrend base to a double shower with tiled floor can happen in the blink of an eye in your consultation, and it is items such as these that add up like crazy. But I figure my estimation should cover it more or less as an indicator. Also - I bought land with view to build and both land and construction were on the same loan, not two separate ones, so it just depends on your broker/ lender how they cut the cloth. Hope this helps. When people talk about the stress of building, I think really the stress relates to not knowing how things work. Once you've done it, you'll be smiling again. And plug into the information provided here on the forum. It really helps. All the best with your new ventures. Building with the Big M, Sandarra Settlement July 16 Site Scrape Sep 22 Slab Oct 12 Framing commenced Oct 13 Build thread: viewtopic.php?f=31&t=39517 Re: First Home Buyer Questions 14Jan 21, 2011 11:00 pm The above posters have covered most of the big expenses already so: Bills to expect in the first 3 month * Strata $x ( im guessing with a $300k limit your buying a unit?) * Special levy $ x * internet connection, water, electricity $600 * furnitures, white goods - * food!! * change of locks - you might want to get the agent to change the locks ( they pay/ vendor) to your door before you settle - $300 *council rate *insurance Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Buyer Questions 15Jan 23, 2011 2:44 pm just a question, when buying a land do you actually know how much council rates you need to pay per year? is it the same if you are residing on the same council? eg. all places under blacktown council will pay 300 per quarter... water sewerage cost? what do you mean by land tax adjustment per annum? Re: First Home Buyer Questions 16Jan 23, 2011 7:19 pm Interesting questions - I take it you're trying to work out the costs if/when purchasing your own block? In which case it's a good idea to investigate the bigger picture of exploring the ramifications of fill (what makes up the soil), fall (the slope of the land) and the actual soil type since these wildly affect building prices. I only mention it because I knew NOTHING about all that and the learning curve is steep - lol! In terms of ongoing costs, my understanding is councils have particular formulas for rates, so you could contact them to find out. Of course, the bigger the block and house the greater the rates - everything hurts cost-wise. I think I've paid nearly $100 bucks to the water company, and that is just regarding Parks charges and 'Keep our Pipes Clean' fees - amazing - haven't even moved in or had a drink of water there! Yikes! My understanding is that while the block is vacant it is subjected to land tax - adjusted to the size of the block - once again, a council formula/question. It depends on how valuable the land is how large the amount is. If anyone else can help with specifics here, go for it. Hope this helps. Building with the Big M, Sandarra Settlement July 16 Site Scrape Sep 22 Slab Oct 12 Framing commenced Oct 13 Build thread: viewtopic.php?f=31&t=39517 Re: First Home Buyer Questions 17Jan 25, 2011 3:33 pm kornjen just a question, when buying a land do you actually know how much council rates you need to pay per year? is it the same if you are residing on the same council? eg. all places under blacktown council will pay 300 per quarter... water sewerage cost? what do you mean by land tax adjustment per annum? Different rate everytime even for the SAME house. Rate is charged based on your "land" value- so if the value of YOUR land is more because it's on a flat surface and higher demand for that street only then you will pay a higher rate. The math formula each council used is on the land tax bill they send to you. Sewerage is standard cost all house and unit pays the same - around $170 per household i think. Rates are higher for commercial property. Land adjustment = the adjustment on the value of your "land value" Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Not much in this responce. My suggestion is, what are you looking to build and why. This will all be impacted by the local councils planning scheme. Familiarise yourself… 6 5871 Hi Suku18 In NSW the statutory required insurances are: 1. HBCF ( Home Building Compensation Fund) - This is if the builder dies or goes broke. But this only covers 20%… 1 2714 So it looks like we finally have some movement on site! Definitely later than expected, but I'll take any progress at this point. I'll drop by over the weekend to get… 5 27738 |