Investing in your first home is undoubtedly an exciting experience. You have been dreaming of homeownership for years, and now you cannot wait to sign on the dotted line.
However, there are additional expenses when buying a home, and sadly, most people overlook them.
One of the most helpful tips for first home buyers in Adelaide is realizing how the investment will impact your overall financial well-being.
Hence, you need to brace yourself and look at the complete picture of what this home will cost you.
We summarized below the costs and expenses you should be thinking about when buying a first house.
Mortgage And Homeowners Insurance
As a homeowner, you want to safeguard your investment, and when it comes to homeowners insurance, usually, you don’t have the option. It will protect you in the case of burglary or fire. If you live in a natural disaster-prone region, you will also want to buy additional insurance for those.
On top of home insurance, if you have less than 20 per cent deposit on the purchase of your house, you also need to get lender’s mortgage insurance. This protects the bank from funding your mortgage in case you fail to make repayments.
There are ways to reduce your homeowners and mortgage insurance costs, and it should be something you should be seriously thinking about.
As a homeowner, you don’t have the luxury of making a phone call to a landlord to take care of all the maintenance when something goes awry and then having it repaired with no loss to you.
If something snaps, you have to fix it. You also need to take care of your landscaping, and it mean you have to buy some new tools and equipment.
To cover these unexpected costs, make sure you have the budget to set aside. It will not place unnecessary stress on your monthly budget.
Council rates are another add-on expense for a homeowner, and this annual fee is non-negotiable. You can find this easily on the home listing.
The rates vary by the state you live in (with an average of about 1 per cent to 2 per cent of your house’s value). However, this can differ as most cities levy tax based on local tax rate combined with property’s assessed value.
You can decide whether to pay it on your own as a separate bill or divide this amount and include it in your mortgage payment monthly.
Furnishings And Appliances
Unlike rentals, most resale or new homes on the market do not necessarily come with the appliances included.
You will probably buy yourself a dryer, washer, fridge or microwave before you move in. Not to mention, you probably need to invest in furnishing your home as well.
Though you can buy most of these as used items if needed, it will also cost you a decent amount of money. And, you need to aware of it.
It is the money you offer to the seller (typically 5 per cent of the house price). It shows the seller you are a sincere buyer and feel comfortable taking their house off the market.
If the offer gets rejected, you get the money back, and if your request is accepted, this money is applied to the closing costs or down payment.
Again, the deposit varies from state to state, and you must consult the first home buyer specialists in Adelaide to understand beforehand the average amount the seller is foreseeing.
It would be best to save an additional 3 per cent to 4 per cent of the property’s value at closing to cover the charges like attorney’s fees, preparation fees and other legal expenses.
Let’s Connect For No-Obligation Consultation
If you feel a little overwhelmed by all of these additional expenses, it is about time to connect with our first home buyer specialists and discuss available options within your budget.
We can help you not to get caught in an unnecessary financial bind.
Just call us directly on 0432 230 298 for a quick chat or submit an online enquiry by clicking on Contact Us button.