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  1. #1
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    Default What's involved in buying a house?

    DH and are moving this week, and there is a bit of a shortage of rentals available in our new area. We are at the stage in our lives where we are looking at buying a home, so we thought; "Why not now?"

    Anyway, we know how much we are willing to spend on a mortgage, and we have a 10%ish deposit, but we have never done this before and need some advice on what's involved?

    What other costs should we expect? Building inspections etc.

    Also, is the First Home Owners grant still around in NSW? Does this come off the upfront cost of the home? How does it work?

    Is a normal settlement period around 6 weeks or so?

    Please help I really honestly have no one else to ask.

    Thanks!!!

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    Default What's involved in buying a house?

    Stamp duty and legal fees. Stamp duty differs state to state but you can find it online. You'll also need to pay council rates and water.

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    I just bought my second house and there was around $20k worth of fees, the fees vary so it is best to talk to the bank for an accurate figure.
    Building inspections are around a couple hundred dollars but this may vary where you live, I recommend doing your research here as there are many dodgy building inspectors around.
    i would try to keep some money aside for after you buy a house as it always seems as soon as you move in something needs doing/fixing.
    settlements will vary, my latest settlement was six weeks.

    Hopefully that is of some help, I should know more considering I've done this twice but tbh I still find the process a bit confusing. Talking to an expert is the best place to start. Good luck.

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    Default What's involved in buying a house?

    Oh, and mortgage lenders insurance in many cases

  5. #5
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    stamp duty
    legal fees
    LMI - if you have under 20% deposit
    building inspection
    agreeable terms eg: how long will settlement be... usually between 60-90 days
    first home owners comes on settlement as a deposit into you bank account - so you can use it however you like

    Things to factor in afterwards are:
    home/contents insurance - can be quite expensive, around $1000
    rates for council and water

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    Default What's involved in buying a house?

    In NSW if you build a house or buy a new house never lived in then you're exempt stamp duty and get $15k FHOG.

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    Default What's involved in buying a house?

    You will need money for conveyancing, etc that can't be borrowed as part of the loan. If you make an offer make sure you put "subject to building inspection" as a condition. As a first home buyer you often have an advantage as other buyers may need to make their offer conditional on the sale of their home, which can take a long time to happen.

    I suggest not just going to a mortgage broker and taking their advice but doing lots of research yourself into the different loans out there. Look for a good introductory rate and then refinance when it runs out.

    If your deposit is less than 20% it limits your options for lenders as even with mortgage insurance, many banks won't lend more than 80% of the value of the home.

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    Default What's involved in buying a house?

    Stamp duty: about 1% of purchase price ($5000 on a $500000 home)

    Solicitors fee around $1000-$1300)

    Building and pest inspection around $500

    Mortgage insurance if you have a 10% deposit will be around $5000 - $8000 depending on price of home and bank. Some banks will add this insurance into the amount you borrow which really helps lower your upfront costs.

    If you qualify for a grant then this is included as part of your deposit. You fill in a form when you apply for the loan and the bank takes care of it.

    Settlement is usually 30 days from date of contract. You usually have 14 days to get your finance approved.

    Basically you find a mortgage broker, find a house, put in an offer and once negotiations are done and offer is accepted you sign the contract. You then give the contract to your broker and they will sit down with you and work out which bank offers a loan that best suits you. You pick a solicitor and fax/email them a copy of the contract and book a building/pest inspection straight away.

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    Default What's involved in buying a house?

    All contacts are subject to building and pest and finance approval unless you are buying at Auction or you state otherwise. These are default conditions

  10. #10
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    Default Re: What's involved in buying a house?

    Step 1: See a mortgage broker. Their services are free & they will be able to tell you how much you can borrow & how much the associated fees (stamp duty, LMI if relevant) will be depending on the purchase & loan amounts. They can also organise a loan pre-approval (conditional loan) OR you can just talk to your bank if you prefer.
    Step 2: Find a lawyer who specialises in conveyancing to do the relevant searches and review the final sales contract.
    Step 3: If you are buying a house, you'll need a building inspection. Find a reputable building inspector (the lawyer may be able to refer you to a good one). If you are buying a unit, you just need strata searches (the lawyer can organise this for you)
    Step 4: Find a property to purchase (the fun part!) - you could start doing this simultaneously with steps 1-3
    Step 5: Negotiate verbally on price. Once you have an indication that the property will be within your price range, indicate your intent to make a firm offer pending building inspection/ strata searches & review of the contract by your lawyer. If the building seems in poor repair, you may wish to get the building inspection report before you make any offers (to give you negotiation power)
    Step 6: Organise the building inspection/ strata searches. Don't be too scared by the building inspection report, they always make a house seem much worse than it is. In particular though, look out for structural issues like damp, termite activity/damage & significant cracking/subsidence. A building & termite inspection is about $500 (from memory). I'm not sure how much a strata search is (when we bought our first unit our lawyer had recently acted for another purchaser in the building, so she didn't charge us for the search).
    Step 7 (can be done at the same time as Step 6 if you think the building seems in good repair) Have your lawyer review the contract. They can then negotiate any specific terms with the vendors' lawyer (e.g. shortened or extended settlement - usual is 6 weeks, required repairs identified from building inspection). Your lawyer should have a fixed cost for this service (~$2500), but will charge for extra time spent for each additional contract you ask them to review (so it's best to only get them to review 1!) You shouldn't have to pay this until after settlement
    Step 8 Have your final offer accepted by the vendors (this might be slightly out of order, can be done whilst the lawyer is reviewing the contract)
    Step 9 Notify the lender (bank or via mortgage broker) that you have had an offer accepted for a property & send a copy of the draft contract.
    Step 10 Sign the contract, pay the deposit (usually 10%) & send all documents to the bank for final loan approval. They will organise a valuation. If you're worried about loan approval, you may be able to have a condition added to the sale contract by your lawyer (subject to finance approval)

    That's about it (phew)... I'm not sure if there is still a first home owner grant in NSW... I think it ended last year... but there might still be a stamp duty concession... try the OSR website (OSR.nsw.gov.au I think)

    Good luck!

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