Things you need to know as a first home buyer
How much can I borrow?
This depends on your individual circumstances and the lender you choose to go with. Selling SA Homes can help you with potential lenders. To get a rough idea of what interest and repayments might be on specific loan amounts, use our loan calculator.
How much do I need for a deposit?
If you are planning on living in the home you will need between five to ten percent of the purchase price plus the costs associated with the purchase such as stamp duty , insurance, conveyancing costs and various fees.
If you are buying the home as an investment the same fees will apply but you will need about ten percent as a deposit. A deposit of less than twenty percent will require you to obtain mortgage insurance.
Do I need mortgage insurance?
You need at least 20% deposit to obtain a mortgage but many lenders will offer a loan to someone with less than 20% deposit on the requirement that they take out Lenders Mortgage Insurance. This protects the lender if the borrower cannot meet their repayments and the property has to be sold.
What costs are involved in buying my first home?
- Mortgage fees
Your chosen lender will have a range of fees which may include a property valuation fee, loan establishment fees, document preparation fees, search fees and mortgage insurance fees if you have less than 20% deposit.
- Pest and building inspection fees
You should hire a building inspector to provide a property inspection report. The fee is generally about $300 but can range between $200 and $475.
- Conveyancing fees
Your conveyancer will charge a fee for service and there will be fees for searches and adjusted rates and taxes calculated by your conveyancer.
- Government fees
In South Australia Stamp Duty and Lands Titles Office registration fees are payable. Stamp duty for first home buyers may be reduced if applying for an off-the-plan stamp duty concession. Use available stamp duty calculators to determine the costs, ask your conveyancer or your Selling SA Homes agent can provide advice.
- Insurance costs
Many first home buyers think they don’t need building insurance until settlement occurs, but when you purchase your new home you need building insurance from when you sign the contract as this is when you are legally committed to ownership of the property.
- Adjusted rates, taxes, levies
A conveyancer will calculate the amount of fees payable on the adjusted portion of rates, taxes and levies from the date of settlement.
- Connection fees
When moving into a new home you may incur connection fees for electricity, gas, water, phone and internet services and these should be factored into your budget.
Am I eligible for first home buyer grants?
As a first home buyer in South Australia you are eligible for the First Home Owner grant if you meet the criteria which includes the property being your principal place of residence for at least six months and if you are building or buying a previously unoccupied home. If you are buying an off-the-plan apartment you may also be eligible for a full stamp duty concession.
Selling SA Homes are happy to provide advice and can provide referrals to builders, lenders and more to help the process of buying a home stress free.
