Cost of buying

Since I’ve been very focused on buying a home lately, I thought I’d share with you the rough finances of buying a home in my area (this does not include ongoing costs of being a home owner). I’m also going to cover some of the expenses we will need to be able to cover.

A cheap home in our area will sell for around $300,000. Hopefully for that we will get some airconditioning in the bedrooms and in the living area (this is not really negotiable in our tropical climate). We also want at least 3 bedrooms, plus something that will pass as a study (a nook?, a room?).  It would also be great to have a decent yard, and we think a fence is non-negotiable because we have a small child. We also would like an outdoor/patio area (or an area that can become a patio) to take advantage of our climate. We also need the home to be near hubby’s work and the hospital for my studies/future work. On a loan of $285,000, repayments will be about $420-$430 a week at current interest rates.

Here is the fee/cost breakdown as I see it:
Home: $300,000

5% deposit: $15,000

Stamp duty on sale: $0 (first home owners)

Loan application fee: $700

Mortgage insurance (to protect lender because we won’t have a 20% deposit): $4000

Other fees: $500

Conveyancing (checks on current ownership etc): $500

Building check/pest inspection: ? (haven’t researched this yet)

Rates (property taxes): $1000 (half-yearly figure; ready in advance)

Moving truck hire: $500

As well as these we need to consider the expenses of moving in:

Fridge (secondhand): $500

Washing machine (secondhand): $500

Couch/sofa (secondhand): $500-800

Minor furnishings: $500

Contingency: $500

So that’s $25,000 before we even get the pre-sale inspections done! That said, some of these latter items I might be able to get cheaper or through family. We don’t have some of these household items because we have been living with my father-in-law for 18 months, and we sold a lot of our electrical items rather than have them sit around for 2 years or more. Of course, we never thought about keeping that money for when we needed it again!

I don’t know how we’re going to wait long enough to get $25,000 in the bank, but I guess we can do it. As I’ve said before, we are using the $7000 first home owners grant to pay off our family debt – so we can’t use that to pay our costs of buying. We also expect to get some lump sums in the near future to pay off the credit card, so we will only have our car loan left to pay off once we start repaying a mortgage … whenever that might be! I am realistic too that we will probably run out of patience living here long before we get that much saved (don’t know what the answer to that is exactly), but if we save in advance for these expenses we will be able to buy a home in a reasonably financially responsible way.

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