For many first home buyers, the struggle to break into the property market is real.
Even though the number of first home buyers breaking into the market has increased to 18 percent, it is taking many people longer to achieve their dream, with the average age of first home buyers increasing to 32.
With so much emphasis placed on saving up a decent deposit to acquire an asset (and potentially avoid paying Lenders Mortgage Insurance (LMI), it’s easy to be blindsided by the extra costs that first home buyers must pay in addition to paying off their new-found home loan.
Here are the extra costs you can expect to come out your wallet once you’ve acquired your first asset:
Outside of your mortgage, stamp duty will be the biggest expense that you will need to budget for. Stamp duty varies from state-to-state, you can check government calculators for details on any concessions applicable to your stamp duty or contact a mortgage advisor at Inovayt Finance for further information.
Footing the bill for home insurance for your new property is non-negotiable. Whether you’ve built your home or moved into an established property, it’s essential that you take out home and contents insurance – It’s Important to ensure your policy starts from the exact date that you pick up your keys.
Tip: Try saving up for the annual insurance amount if possible as most companies will provide you with a discount if you pay your premium annually (as opposed to setting up monthly direct debits).
You’ve worked hard for your home and while it’s not necessary to have an interior decorator on-hand as you move in, you will inevitably need something to sit on as well as somewhere to store your belongings.
Furniture is often an after-thought when it comes to saving for a property, but you’ll be surprised how many pieces of furniture you’ll need (and how quickly the costs add up) once you move in.
If you’re budget-conscious, monitor online bargain platforms such as Facebook marketplace, Gumtree or eBay for frugal furniture finds.
Landscaping and fencing
If you’ve built a new home, it’s likely you’ve been caught up in the excitement of choosing colour palettes benchtop materials.
Give some thought to the outside of your home too – such as landscaping and fencing costs which often aren’t included in the cost of newly built homes.
It’s best to budget for these new expenses before you move in by getting quotes for driveways, landscaping, and fencing while you’re still saving for your deposit. Landscaping costs can spiral into thousands of dollars depending on the work you’re after, while driveways are usually charged by the concrete and per area size.
To help cut costs, you can also contact your local Council and write a letter to your new neighbours to request they share the cost of your new fence.
While you may have factored in your new mortgage repayments into your budget, you will need to keep in mind that being a homeowner also comes with the responsibility of paying Council rates.
Council rates are a mandatory charge and while each local government area is different, your rate amount will be based off a valuation of your property. To research your Council’s rates and charges, you can visit the Know Your Council website.
Whether you’re a first home buyer or need information about refinancing, the experts at Inovayt Finance will help you to make the right decision by finding the most competitive loan that matches your individual needs.
Book a free meeting today to discuss how you can best prepare for the extra costs that you will encounter once you get the keys to your first home.