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Home Buying. How much really costs?

The true cost of buying a home goes well beyond the purchase price.

Do you know what you’ll be up for when the SOLD sticker goes on? Take a look at the top ten home buying costs you may not have thought of, and our tips on ways to save.

1. The price of your home.

This is important – the listed price of a property isn’t necessarily the one you’ll have to pay. Some hard bargaining can see you save thousands of dollars. As a general rule, try offering 10% less than the listed price, or more if the property has been on the market for a while. Bear in mind, lenders generally want to see a deposit of at least 5%, so don’t commit to a property you can’t afford.

TIP: Poker faces on. Don’t let the vendor know you love the place. It’s a lot harder to haggle for a discount if the agent can see you’d sell your own arm to get inside the door

2. Stamp duty.

Stamp duty is compulsory, sorry. It’s levied by all state/territory governments so it’s as unavoidable as a pair of socks from grandma on your birthday. But there are ways to trim the tab. Because duty is based on the price paid for a property (when you buy it), buying vacant land first and building later can mean paying less duty at the time of purchase than buying an established home.

Either way, the more you can negotiate on price, the more you’ll save on stamp duty. Contact the Office of State Revenue in your area for details of concessions. Some states offer savings for first home buyers and/or new home builders

3. Conveyancing.

Conveyancing covers everything from reviewing the contract of sale through to transferring your new home into your name and carrying around a fancy leather compendium. It’s a job that can be done by a solicitor , but you may be able to halve the cost by using a professional conveyancer. Budget for around $1,000 though fees vary widely so shop around. Line up a conveyancer or solicitor before you start home hunting. That way you can act quickly (and maybe cheaply) when you find the right property.

4. Pest and building inspections.

It just makes business sense to see what’s going on under the covers of your potential new home. A pest and/or building inspection isn’t essential but it will reveal structural faults, dodgy building work or nests of tiny pink mice the vendor may be trying hide. Allow around $500 for a combined report. A poor pest/building report can be useful in price negotiations – if you expose future costs or problematic areas, the vendor might drop the price. Either way, make sure you can afford any repairs once the place is yours.

5. Strata report.

If you’re buying an apartment, villa or townhouse, a strata report will let you know if any major building work is on the agenda – an expense the owners will have to cover. The report itself costs about $300 but the peace of mind is invaluable. Strata reports can be provided by independent firms, or you could trim the cost by asking your conveyancer to provide one

6. Loan and account-keeping fees.

Just like the loans themselves, home-loan application fees are super variable. They can range from $0 through to over $700, so it pays to compare between lenders. Watch out for ongoing account-keeping fees too. They quickly stack up. Use the ‘comparison’ rate to discover the true cost of a loan, including those hidden extras

7. Lenders Mortgage Insurance (LMI).

LMI applies if you borrow 80% or more of your home’s value. It protects the lender, not you – it’s to help cover their losses if you renege on the agreement. That makes it a cost worth minimising.

The easiest way to do this is by saving the largest deposit possible. If you can save a 20% deposit , you may not have to pay LMI at all. You may be able to bundle LMI into the total cost of the loan rather than paying it upfront. Of course, this means paying interest on the premium over the loan term, which bumps up the cost

8. Home building insurance.

The very moment you pay a deposit, you have a financial interest in a property. That means you’re potentially liable for injuries and accidents that happen there, even if you haven’t moved in yet. And it means any damage to the property is up to you to cover. You need to take out home building insurance without delay. Save on premiums by arranging cover online or ask about multi-policy discounts on home building insurance with your current insurer

9. Getting set up with utilities.

Unfortunately, utilities usually don’t come with you to your new house. You’ll probably have to pay to reconnect them, and maybe even pay a disconnection fee at your old place. Connection fees for power and/or gas can be around $80. Allow more if you’re adding internet and pay TV.

Make sure you allow for time, too. Book appointments in advance so you don’t get caught in the dark. This is a good time to shop around for energy providers – it could save you a bundle in power bills

10. Furniture removal.

Moving costs can range from a case of beer and a barbecue for a few mates with a ute through to several thousand dollars for a full-service removalist. Work out what’s affordable for you. Plus, you should probably budget for supplies to get you through moving day. Shop around for moving gear. Truck-hire companies often have “free” days over the weekend, and second-hand boxes can save you a small fortune.

You always knew buying a house was going to be expensive. With our help, you can plan ahead and avoid unwelcome surprises.

 

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Government mortgage guarantee scheme aims to help first home buyers enter the property market

First Home Loan Deposit Scheme Explained: 

  • A Federal Government scheme to allow first home buyers to purchase a property with a deposit as little as 5 per cent will operate on a “first-in, best-dressed” basis
  • Save 5% deposit of your property and government will guarantee the remaining 15% of the deposit. You still borrow 95%, but avoid LMI. 
  • 10,000 first home buyers on low and middle incomes enter the market each year from January 2020
  • The program will be open to singles with a taxable income up to $125,000 per year and couples earning less than $200,000 per year, and will apply to owner-occupied loans on a principal and interest basis.
  • Mortgage need to be owner occupied with principal and interest (P&I) repayments. 
  • More information to come on which lender will be involved and what the interest rates will be. 
  • Price thresholds apply. 

Scheme’s property price caps:

State/territory Capital city and regional centres Rest of state
NSW $700,000 $450,000
VIC $600,000 $375,000
QLD $475,000 $400,000
WA $400,000 $300,000
SA $400,000 $250,000
TAS $400,000 $300,000
ACT $500,000
NT $375,000

For further information, please contact us! 

1300 429 921

www.spmortgages.com.au

ACL 389328/487319 

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Finding hard securing Home Loan? Introducing Solutions.

Learning and understanding client’s unique situation/goal has shaped us to be “Home Loan Solution” finder than simply dealing with typical lender profile.

Means where the big lenders stop, our expertise to find ‘Loan Solutions’ continues.

Sometimes getting the right home loan can be a challenge, especially if you’ve been knocked back by the banks, have a blemish on your credit report, are self-employed or don’t have up-to-date tax returns. This is where our expertise come in to find a Loan Solution!

Whatever your circumstances, we deal with lenders from our panel for to find Loan Solutions who takes a personal approach to your home loan. As your broker, we will work with you and base decisions on discussions and supporting documentation, not data alone. The approach is based on flexible lending criteria to help you begin your journey.

If you or know anyone in ambiguity about their unique situation and getting Home Loan – PLEASE SPEAK TO US OR REFER THEM TO US!

Referral Form

 

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MORTGAGE BROKER FOR YOUR LENDING SOLUTIONS

 

“Qualifying for home loan remains a source of anxiety as banks continue to strengthen their lending rules. Home loan borrowers are most worried about over borrowing capacity, fearing loan rejection or concerned they will fall short of their lending expectations.”

 

Our motto is simple “to pay close attention to the concerns of clients and understand their unique situation”

As a boutique mortgage broker, we will provide you a tailored service that others simply can’t match. Whether you are refinancing, investing or buying first home, you can rest easy knowing that our expert broker will work around the clock to get you a deal that works for you.

We will remove the pain points for you when applying for a loan, not only from a convenience perspective, but from an expertise level that gives you a greater chance of success.

Along with discussing possible features like competitive interest rates, redraw facilities and other features, we will provide you with customer service that you will value for the life of your loan!

Our commitment to transparency and communication means help is only a phone call away – and if you can’t reach us, we promise get back to you within 5  business hours. 

 

CALL US to get our expert broker by your side and feel confident that you are in safe hands.

Our service is NO COST to YOU as we get paid by the lender.

 

M) 0433 180 646 

e) pujan@spmortgages.com.au 

Authorised Credit Representative of Connective Credit Services Pty Ltd under Australian Credit Licence No. 389328/ CRN 487319. Your full financial situation and requirements need to be considered prior to any offer and acceptance of a loan product.

 

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Having bank-xiety?

A new survey from ME revealed 94% of Australians think banks don’t act in their best interest. 95% agree banks sometimes put profits before customers and 92% believe banks sell products and services inappropriate to customers.

Jamie McPhee, ME CEO, coined the phrase ‘bank-xiety’ as a term to describe these findings of worry, nervousness and distrust towards banks.
Despite this, only 14% of respondents have done something about this and have switched or are in the process of switching to a bank they trust.

If you  are facing any of these symptoms TALK TO US!  WE CAN HELP.

  • With the same bank for many years and you know the rate has gone up, but you are scared to check by how much.
  • You’re struggling to keep up with loan repayments, but you don’t think your bank will help.
  • You’ve lost faith in your bank after reading the Banking Royal Commission News.
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Royal Commission’s Final Report

The national peak body representing finance and mortgage brokers says the royal commission has failed to understand the role of mortgage brokers and the competitiveness they bring to the market following its recommendations to eliminate trail commissions for brokers, which the Government has implemented from July next year.

Managing director of the Finance Brokers Association of Australia (FBAA), Peter White said today should be the day of reckoning for big banks who have spent far too many years putting profits above people, yet the result of eliminating trail commissions could realistically mean interest rate hikes.

“This could force up-front commissions to rise in order to compensate for reduced revenues to brokerages, which in turn will lift interest rates and make housing affordability more difficult,” he explained.

He also slammed the recommendation to eliminate up-front commissions, and congratulated the Government for not reacting to this.

“Commissioner Hayne wants to hand even more power to the big banks and eliminate competition, which is a ridiculous scenario and shows just how out of touch he is when it comes to brokers.

“If a user-pays model was implemented, we know that most borrowers wouldn’t pay, and banks would make more money and standards would drop further.

“It’s very disappointing that the royal commission wants to destroy some 20,000 small businesses for the monetary gain of the big banks, and we trust the Government will see clearly on this and continue to work extensively with our industry to improve consumer outcomes.”

Mr White said borrowers trust and support brokers.

“There is a reason why over 59 per cent of loans are written through brokers. Customers have no issues with broker commissions.

“Customers get a better outcome by using a mortgage broker. They get better service, more choice and a well trained finance expert to take them through what is a massive and stressful time of their life,” he said.

He also pointed out that the broking sector was well already ahead of the game, having been through reviews from ASIC and the productivity commission.

 

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5 key home buying and lending trends to expect this Spring

Spring is here, and that means property investors are going to be out and about soaking up the sun and looking for their next investment opportunity in the fresh spring air. I think five key trends buyers and borrowers should be aware of over the next three months:

  • Cooling real estate market
  • Declining investor interest
  • Access to credit will remain tight
  • Good opportunities for first home buyers
  • Refinancing on the rise

 

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March 2018: RBA leaves interest rate on hold but are you saving on your loan?

We have now gone 19 months without any change from the RBA – I think this has provided much-needed stability for mortgage holders.

If you are mortgage holder, you should make sure your loan is not costing you thousands of dollars by not taking advantage to seek the best deal you can get on your mortgage in the current market.

Get a guidance and opinion from our Mortgage Broker who can check your mortgage health and see whether you are eligible to refinance and save thousands!

Contact us for free consulatation 0433 180 646 or email info@spmortgages.com.au

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First Home Buyers – Avoid Costly Mistakes!

2 common mistakes First Home Buyers make before real house hunting.

1. NOT getting pre-approval: just knowing you qualify for a home loan is not enough. Before you start searching for properties, you should obtain a pre-approval letter from lender on how much they are willing to lend you.

Benefits of gaining pre-approval:

– Let you buy the property with confidence since it gives you clear guidance on how much money you can borrow
– You will not set yourself up for disappointment if you think you can spend more than your lender agrees to lend you
– It can speed up your mortgage application process, so when you decide on a property, you can access your home loan faster.
– It shows real estate agents and vendors that you are serious about doing a deal, which could make negotiations easier.
– It can be valid for up to 6 months

DON’T:

– Get multiple pre-approvals with different lenders because having multiple can affect your credit rating, as your credit file will show numerous enquiries with different lenders.
– If you are not seriously considering purchasing than you should not seek a pre-approval because unnecessary finance enquiry may negatively impact on your credit rating.

2. Underestimating or not estimating additional costs is a fatal mistake many first-home buyers make and thinking that if they’ve got a $50,000 deposit and a $500,000 home loan they will be able to afford a $550,000 property. The reality is that there are many other costs you should know and budget ahead of time so you won’t be losing sleep when you move into your new home.

Some of the additional costs include:

– Stamp duty
– LMI – Low mortgage insurance (applicable if your loan value is more than 80%)
– Solicitor’s cost
– Home insurance
– Moving costs
– Council rates and water rates

Buying your first home can be quite tricky. That’s why, I am here to be with you every step of the way AND PROTECT YOU FROM MAKING ANY COSTLY MISTAKE!

Contact us to help you avoid any mistake with your first property!

info@spmortgages.com.au