Associated Costs when purchasing a house costing $410.000

[richard300]

Ok, apologies if this is the wrong sub-forum, but i thought this post was slightly more appropriate here, than in the Renting & Real Estate sub forum.

 

It's a bit of a hypothetical question really - As we are still yet to land in SA (1st April 2015) get work, keep our noses clean and do all the right things to build up a good credit rating BUT as soon as we are able to, we want to buy a home in SA.

 

I know things can change and grants can come and go - but lets say (for arguments sake) that we were looking for a home and properties that met our criteria were at the $425.000 price point.

 

Whats the minimum (percentage) deposit that the banks require?

What are the other associated costs?

 

I think i am correct in thinking that the Stamp Duty and Conveyancing cost is the really big expense - Currently working out at $17,580?

I see there is a First Home Buyers Grant...... But am i right in thinking that this only applies to new builds? Is this for Off plan only? and am i right in thinking is worth $15.000?

 

Thanks,

 

Richard.

[Guest Claire-n-tel]

Hi Richard

 

 

You're correct about the stamp duty being a major expense, $17,580 on a $425,000 property. Transfer fees will be $3,127. Conveyancing fees will depend on who you use, we normally allow $1,500 which should be more than enough.

 

 

What visa are you coming over on? Generally if you're PR then you'll be treated the same as an Australian citizen, if you're temporary then you'll normally only be able to access an 80% LVR loan, maybe 90%. If you're permanent, generally 5% is the minimum deposit. So, as a very rough guide, with deposit and fees you need funds of around 10% of the property value.

 

 

Generally (assuming you need to borrow over 80% LVR), you'll need 5% deposit to be 'genuine', thats been in the bank for 3 months + (in an UK account is fine).

 

 

First Home Owners Grant should be available if you're permanent, and is $15,000 on a new house, one that has never been lived in before.

 

 

Employment wise, banks differ in their requirements. Generally, you couldn't be on probation, and would need to be employed over 6 months. Some banks would accept 3 months. I just got a loan for a UK migrant who had only been employed a couple of weeks, that was a sub 80% LVR loan, and their employer wrote a letter to say that they were not on probation. Banks also look favourably on previous long term employment history, and in their case they had had a single employer in the UK for 20+ years, and were here doing a similar job.

 

 

If you had jobs lined up, it may be possible to arrange a loan (with at least one lender) while still in the UK and get it pre-approved. Full approval would only happen once you're here. So if you knew that you wanted to buy around the $425,000 mark, get a loan pre-approved for that amount, and then once here you have a few months to find a property. You'd need good employment history and be getting a similar job here.

 

 

So many factors depend on your individual situation.

 

 

Tel

Edited November 15, 2014 by snifter
forum rules re self promotion

[sidestep]

Don't be in too much of a hurry to buy as soon as you get here. Unless you've got the feel for the place you could end up with somewhere that totally does not fit your new life. Take a rental for a few months and go from there.

 

Just my $0.02c worth. YMMV.

[Guest Guest14361]

Plus bank fees for the loan setup...$600, plus stamp duty on the bank loan, then there's gas electric phone fees for set up, also best to get a house inspection done before you buy in case it hides any nasties, get the air con checked, get the heater checked and check if it's a hot water boiler that if it's 10 years old it will be about knackered....

[Guest Claire-n-tel]

Plus bank fees for the loan setup...$600, plus stamp duty on the bank loan, then there's gas electric phone fees for set up, also best to get a house inspection done before you buy in case it hides any nasties, get the air con checked, get the heater checked and check if it's a hot water boiler that if it's 10 years old it will be about knackered....

 

The Stamp Duty on Mortgages was abolished on 1st July 2009.

 

Bank fees vary widely from nothing to more than $600.

[Guest Guest14361]

About time....Been a while since I moved houses...SA still the highest stamp duty paying state?

[Jessica Berry]

Another thing to consider if you buy a house, but are still renting and you break your lease you will usually have to continue to pay the rent until another tenant is found and also you may have to pay advertising costs to advertise the rental property as well.

[sidestep]

Broadband internet access is a bit hit and miss as well. If you buy a new house yo may find you can't get it unless you go wireless as there'd be no copper in the ground.

 

Had ADSL2 in Hallett Cove. Moved to Sheidow Park and can only get ADSL1. Will never move to a non-ADSL2 enabled house again.

[richard300]

Thank you Tel, for your detailed reply. And thank yo for all the other feedback - will definitely make inquiries about broadband wherever we consider buying.

Sidestep - You are right, we wouldn't want to rush into buying a property. We will likely be renting for 12 months before we decide (Although the Port Noarlunga area) is ideally where we see ourselves.... for a few reasons.

 

With the New build offering an opportunity to for less costs and we fancy a 'new' home - is there much development and opportunity to purchase new build properties in the area?

[erobertson]

Don't forget about the lenders mortgage insurance if you have less than a 20% deposit. We put down 10% and got stung for $13,000 of LMI!

[Andrew from Vista Financial]

Thank you Tel, for your detailed reply. And thank yo for all the other feedback - will definitely make inquiries about broadband wherever we consider buying.

Sidestep - You are right, we wouldn't want to rush into buying a property. We will likely be renting for 12 months before we decide (Although the Port Noarlunga area) is ideally where we see ourselves.... for a few reasons.

 

With the New build offering an opportunity to for less costs and we fancy a 'new' home - is there much development and opportunity to purchase new build properties in the area?

 

Hi Richard

 

Actually there are very few new build homes that come on the market, it is more common here to build a home and there are certainly a lot of them being built around the Noarlunga area particularly Seaford.

 

The FHOG is available for new builds: http://www.revenuesa.sa.gov.au/grants-and-concessions/first-home-owners this thread may also assist http://www.pomsinadelaide.com/forum/money-finance/32547-mortgages-grants-buying-property-update.html

 

A broad overview of how it works is that you purchase a block (not plot, lol) of land of which you pay the usual buying costs on ie stamp duty and then source a builder that you wish to use to build the home.

 

No extra associated buying costs are payable on the build ie stamp duty which of course is a further cost saving (as well as the FHOG if applicable) which is only released when slab is laid.

 

As said it is very common here and there are loads of display homes/villages you can visit and are able to talk to builders to get an idea yourself of how it all works.

 

Just to note that although there are cost savings by paying less stamp and grants available over established homes it isn't necessarily going to be a cost saving in total. You have to account for the fact that you will be paying a mortgage on the land and progressive build during construction whilst paying rent and there are a lot of additional costs once underway therefore by the time the house is built and driveways and landscaping etc paid for it may have been cheaper to buy an established house.

 

Obviously you are getting a brand new home and one designed or picked upon how you want it but it is not necessarily going to be a cheaper option.

 

Anyway you will be here soon enough and then you can do your own research, we are just about to embark on a build ourselves after having lived in the established home we bought in 2009.

 

Anyhow whichever way you go there will be many hours spent at weekends visiting open houses or display villages!!! All good fun ....... to begin with anyway, lol

 

 

KR

 

Andy

Edited November 17, 2014 by Andrew from Vista Financial