Budgeting For Your Home Purchase

Buying your first home is incredibly exciting time - but you need to budget carefully for the additional costs involved.

The biggest additional cost you face is stamp duty. This is a tax that you have to pay when you purchase a property. The amount you pay varies from state to state and is dependent on the value of the property. However, as the cost can be as high as 6%, it is a significant additional expense.

There are some concessions available and it is certainly worth checking to see if you qualify for one. Some states do not charge stamp duty if your home or vacant land is valued at less than a set amount (such as $500,000 in NSW). And, under the First Home Owners Grant (FHOG), you may be eligible for a one off payment of $7000.

Solicitor's or Legal Fees - these are the costs involved in having all the legal documents and searches prepared for the purchase. There isn't a fixed amount but expect to pay anything from $500 to $1,700. You may have to pay legal fees to check contracts before bidding at auction - even if your bid is unsuccessful.

Land Transfer Registration - This fee is for recording a change of owner at the Land Titles Office and is payable each time a property is sold. Again, the cost varies from state to state but can range from $60 to $1,000.

Mortgage Fees - A range of fees is associated with mortgages, including a mortgage application or establishment fee, a valuation fee, legal fees, maintenance fees, a loan registration fee and even stamp duty on your mortgage. And if your home loan exceeds 80% of the home value, you will also have to take out mortgage insurance.

Survey Fee - Though this is not compulsory, you should undertake a full structural survey. They cost around $450, but could save you a fortune in the long run.

Termite & Pest Inspection - A termite inspection is always recommended, and is actually compulsory in some states. You should expect to pay between $150 and $250.

Strata Inspection - This only applies to apartments, and advises you of any structural or administrative problems in the building as a whole. At a cost of approximately $200, this is information well worth having.

Buildings Insurance - This insurance, against any structural and other damage, needs to be in place from the day you sign the purchase contract.

With all these costs, plus the additional cost of moving, you'll need to be sure your new home is the perfect choice. When you make your next move, you'll also have to pay those hefty estate agent fees too!

Your own home is the biggest investment decision you'll ever make - so make sure you protect it with the right level of insurance for your needs.