Research can save you thousands
Thursday, 1 May 2014
1. Research the costs and entitlements associated with the purchase of different types of properties. As a homeowner, you will be required to pay stamp duty, council rates and an emergency services levy.
But you can also access a number of grants or concessions depending on the type of property you buy. Factor these costs and entitlements into your budget.
2. Determine the type of property you want. Attend as many open inspections as you can to gain a better understanding of the layout and features you want in a home. Consider whether you want to buy an existing property or build a new home to suit your needs.
If contemplating the latter visit the many display villages throughout Adelaide and surrounds to see what local builders can offer. It’s important to also consider your future requirements, not just your current needs. Doing your research upfront means you’ll find a home better suited to your long-term needs.
3. SET a savings goal, based on what you will be required to pay as a deposit along with other fees and charges that make up the upfront costs. The sooner you know what your target is, the sooner you can commence your savings plan.
To help you determine a target, look up median house prices in the suburbs you are considering and check out online calculators.
4. Identify if you are eligible to take advantage of the $5,000 First Home Owners Grant (FHOG) for established houses. This grant is scheduled to end on 30 June 2014 (a contract must be signed on or before that date), and could provide a much needed financial boost if you are looking to buy in the coming months. There is also the ongoing $15,000 FHOG for newly built homes to consider.
5. Think about living in an inner city apartment as you could be eligible for an off-the-plan stamp duty concession of up to $21,330 (capped at stamp duty payable on a $500,000 apartment), if you get in before 30 June 2014. This concession is in addition to the FHOG so adds up to major savings. The concession will continue after 30 June but at a lower rate so check the Revenue SA website for details.
6. Look for a lender that helps you minimise upfront costs. Some lenders offer low deposit loans that reduce the amount of savings you need to meet the upfront costs.
Also look for a lender that doesn’t charge Lenders Mortgage Insurance (LMI), which could also save you thousands in upfront fees.
7. Do your due diligence on properties that are strata or community title. Ask to see the records of the company managing the strata, including the minutes of meetings, the accounts and the rules or by-laws.
- Is there a regular fee or levy?
- Is the particular unit up to date with payments?
- Do the rules allow you to use the property in the way you intend?
8. Consider a shared appreciation loan. This type of loan enables you to borrow more, so you can afford the house you want or the suburb you prefer, and will help keep your repayments manageable.
In return, you share a portion of any increase in the property’s value when the property is sold or refinanced.