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First home buyer NSW - whats involved

First home buyer NSW - whats involved

Old Jun 22nd 2009, 1:22 am
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Default First home buyer NSW - whats involved

Hello

I am hoping for a bit of advice. We are thinking of buying a house - well teeny tiny apartment - in Sydney and are totally confused by all the different costs involved.

Basically we are hoping to take advantage of the first homebuyer grant, but not sure what it would be, and also what other costs we need to take into account.

So basically if we were thinking of buying a place for under 500k, what are we looking at? Am I right in thinking that the stamp duty etc is waived in first timers if the property is under 500? And the grant would be 14k if we buy before September?
What else do we need to take into account? Insurance, what other bank fees, govt fees etc?

Any advice gratefully accepted!!

Thanks
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Old Jun 22nd 2009, 5:46 am
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Default Re: First home buyer NSW - whats involved

Originally Posted by Daydreamer123
Hello

I am hoping for a bit of advice. We are thinking of buying a house - well teeny tiny apartment - in Sydney and are totally confused by all the different costs involved.

Basically we are hoping to take advantage of the first homebuyer grant, but not sure what it would be, and also what other costs we need to take into account.

So basically if we were thinking of buying a place for under 500k, what are we looking at? Am I right in thinking that the stamp duty etc is waived in first timers if the property is under 500? And the grant would be 14k if we buy before September?
What else do we need to take into account? Insurance, what other bank fees, govt fees etc?

Any advice gratefully accepted!!

Thanks
Firstly does one of the the buyers have PR status, otherwise you will get nothing.

Under 500K on a used house, you should get the first time buyers grant and have the stamp duty completely waived.

Work on about $400 for a decent building inspection, and about $300 for a pest inspection (you really must get these done).

Conveyancing fees i.e. searches, title changes all paper work etc base on about $1,200 you can either go to a solicitor or a property conveyer (in NSW).

Your mortgage may have arrangement fees.

When you move in, you propably will need some money to start paying council rate fees we had to basically buy out the balance of what our seller had paid in advance) so anywhere from $0 to $1,500+ This will probably also be the case for water.

If you are buying an apartment there may be yearly 'strata' fees, which cover the building owners cost of maininting public areas, driveways etc.

Then don't forget insurance and removal costs.
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Old Jun 22nd 2009, 9:18 am
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Default Re: First home buyer NSW - whats involved

Originally Posted by Red_V_Roger
Firstly does one of the the buyers have PR status, otherwise you will get nothing.

Under 500K on a used house, you should get the first time buyers grant and have the stamp duty completely waived.

Work on about $400 for a decent building inspection, and about $300 for a pest inspection (you really must get these done).

Conveyancing fees i.e. searches, title changes all paper work etc base on about $1,200 you can either go to a solicitor or a property conveyer (in NSW).

Your mortgage may have arrangement fees.

When you move in, you propably will need some money to start paying council rate fees we had to basically buy out the balance of what our seller had paid in advance) so anywhere from $0 to $1,500+ This will probably also be the case for water.

If you are buying an apartment there may be yearly 'strata' fees, which cover the building owners cost of maininting public areas, driveways etc.

Then don't forget insurance and removal costs.
check out some of the main banks websites for LMI amounts as this will depend on the amount you borrow (assuming you are borrowing over 85% of purchase price). Also check that you will be able to get the loan you want, most banks are stopping at 95% LVR and are also wanting to see proof of genuine savings.

If you don't have 10% deposit then you will need to arrange other finance if you are thinking about buying at auction, I don't know what costs this would have.

Also spend time doing your research so you know the prices in the area you are looking at as it can be easy to overpay especially with the scramble that seems to be going on at the first home end of the market at present.
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Old Jun 22nd 2009, 11:13 pm
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Default Re: First home buyer NSW - whats involved

Thanks for the advice guys.

We think we are going to be ok for getting the loan, we are looking at 15% of our combined income, and most places say don't go over 30%. So we are playing safe on that front. We actually really want a small place. The house we are currently renting is a too big for us, but it was all we could find at the time. Three bedrooms, dining room, sitting room and kitchen plus garden is a lot of effort when you only live in three of them.

I am concerned that we are not taking into account all of the possible costs.
So am I right in thinking that this is what is involved:
Deposit
Home loan
Mortgage insurance (LMI)
Stamp duty - waived for properties below $500000
building inspection
pest inspection
conveyancing
mortgage arrangement fees
Insurance
moving costs
Miscellenaeous - water, council fees, strata etc

And we can look at getting the full first time buyers allowance if we go for it before end of September, which $14000

Have I missed anything?
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Old Jun 22nd 2009, 11:32 pm
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Default Re: First home buyer NSW - whats involved

Hi there,
Just make sure you have enough deposit.... some banks will do 5% deposit.... must be genuinely saved meaning you have to show it being held or accumulated in a bank account over a minimum of 3 months. FHOG will not contribute to this deposit. Then again some lenders actually need a full 10% deposit so it depends who you are going with. If you're both working and its a smaller home loan the repayments will probably not be the issue as you said. There are lenders left who will capitalise your lenders mortgage insurance - that means they'll add it onto the loan. If your cash funds are tight then that will be a good option for you.
Looks like your list is pretty exhaustive.... and don't sound so worried.... this is meant to be fun
You should make an appointment with a mortgage broker. I am one but I'm in Queensland.... get someone local to come and see you. Most brokers won't charge you as they are paid by the banks - in fact if they want to charge you a fee for their service, then call another one who wont!
The broker will be able to give you pretty precise costings. They'll also be able to hunt around for the most appropriate lender for you in terms of your deposit, fees, interest rates etc. They can also arrange a pre-approval.... that'll put your mind at rest.
And with regards to buying at auction..... this could be a big "no no" in todays market for the first home buyer. If you buy at auction, you go "unconditional" and since most lenders won't give you a full approval until they have a contract and have valued the property this could be very risky. If the valuation came in low, you could be in trouble and losing money. Again, talk to your broker about this. And make sure its somebody you like because they'll be looking after you for years.
Good luck! And happy house hunting! If you want any help, or have any other questions, feel free to ask.
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Old Jun 22nd 2009, 11:34 pm
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Default Re: First home buyer NSW - whats involved

ps - with the three months "genuine savings" - some lenders want 6 months. Your broker will be able to confirm depending on the lender of your choice.
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Old Jun 22nd 2009, 11:39 pm
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Default Re: First home buyer NSW - whats involved

Ta for that. Very helpful

We are trying to avoid auctions. Way too confusing!!

I think you can tell I am a bit of a control freak. I also really dont like spending money, thats why we are going for something cheap.
The more info I can get the better!
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Old Jun 23rd 2009, 3:19 am
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Default Re: First home buyer NSW - whats involved

Originally Posted by Daydreamer123
Thanks for the advice guys.

We think we are going to be ok for getting the loan, we are looking at 15% of our combined income, and most places say don't go over 30%. So we are playing safe on that front. We actually really want a small place. The house we are currently renting is a too big for us, but it was all we could find at the time. Three bedrooms, dining room, sitting room and kitchen plus garden is a lot of effort when you only live in three of them.

I am concerned that we are not taking into account all of the possible costs.
So am I right in thinking that this is what is involved:
Deposit
Home loan
Mortgage insurance (LMI)
Stamp duty - waived for properties below $500000
building inspection
pest inspection
conveyancing
mortgage arrangement fees
Insurance
moving costs
Miscellenaeous - water, council fees, strata etc

And we can look at getting the full first time buyers allowance if we go for it before end of September, which $14000

Have I missed anything?

I believe that if you buy a brand new, previously unoccupied home in NSW, then a full FHOG of $24k applies. My GF has just done this, and the Commonwealth bank were happy to take that as a deposit. She used a separate deposit loan to pay the deposit payable on exchange of contracts.

Where abouts have you been looking?


S
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Old Jun 23rd 2009, 4:01 am
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Default Re: First home buyer NSW - whats involved

And don't forget that you are committed to buy once the contract is signed - so insure it from that date, not when you move in. Shame to have it burn down and still be liable to buy the smoking shell!
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Old Jun 23rd 2009, 4:56 am
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Default Re: First home buyer NSW - whats involved

Originally Posted by Wol
And don't forget that you are committed to buy once the contract is signed - so insure it from that date, not when you move in. Shame to have it burn down and still be liable to buy the smoking shell!
I asked Westpac about this when getting our Mortgage and they said just insure from the day before the completion.
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Old Jun 23rd 2009, 5:39 am
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Default Re: First home buyer NSW - whats involved

Originally Posted by Swerv-o
I believe that if you buy a brand new, previously unoccupied home in NSW, then a full FHOG of $24k applies. My GF has just done this, and the Commonwealth bank were happy to take that as a deposit. She used a separate deposit loan to pay the deposit payable on exchange of contracts.

Where abouts have you been looking?


S
Yeah, I did see that. I have seen a few new builds, but they are really quite expensive and very tiny compared with something older. We are looking around the Lower North Shore, because that is really convenient for work. We both work in North Sydney. But if we find something great we will be more than happy to get a bit more money out of the government!

If she used the FHOG as deposit, does that mean it gets paid out quite quickly? We assumed it would take a while to get it.


Will remember about the insurance, thanks for the tip!
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Old Jun 23rd 2009, 5:56 am
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Default Re: First home buyer NSW - whats involved

I believe that if you buy a brand new, previously unoccupied home in NSW, then a full FHOG of $24k applies. My GF has just done this, and the Commonwealth bank were happy to take that as a deposit. She used a separate deposit loan to pay the deposit payable on exchange of contracts.
This is all very encouraging, as I myself have very little deposit. Thanks!
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Old Jun 23rd 2009, 6:02 am
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Default Re: First home buyer NSW - whats involved

If you are going through an approved agent (ie the lender will most likely be an "approved agent" then the grant will usually be made available for settlement as long as the application and supporting documents have been presented on time.... ie the money never comes to you and is made directly available for property hand over.
However, I would definitely check about FHOG being used as full deposit. Unfortunately most lenders have very recently changed their guidelines.... for Commonwealth Bank if you are borrowing 85%+ of the purchase price/valuation, then you do have to show 5% "genuine" as mentioned before. As far as I am aware this applies to all states. With Westpac bank they will only lend up to 92% including LMI unless you have an existing relationship with them. Again "genuine savings" applies. There may be some building societies who can do something different. Again, the best advice is to seek professional assistance first then you'll know for sure what will suit your own personal circumstances.
All the best
Cheers
Michelle
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Old Jun 23rd 2009, 7:12 am
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Default Re: First home buyer NSW - whats involved

Originally Posted by Red_V_Roger
I asked Westpac about this when getting our Mortgage and they said just insure from the day before the completion.
That's because they only have an interest in the property from the day their loan is active - ie on completion!

If the place fell into a sinkhole a week before completion, you would still be obligated to buy it - but do you think Westpac would still give you the money?
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Old Jun 23rd 2009, 7:15 am
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Default Re: First home buyer NSW - whats involved

hopefully that doesnt happen to us! Will make sure that we have the right insurance!
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