Buying Your First Home: Upfront Fees You Should Know About
Delving into the upfront costs and fees that come with your first home.
Once you've got your head around the world of deposits, there’s a range of other upfront fees and costs that you could be facing as a first-time buyer. From the start, it’s important to familiarise yourself with all the smaller fees here and there. That way, you won’t be caught off-guard, and you can start budgeting for these early on.
Keep reading to learn the ins and outs, and reach out to our team to ask any questions. We're here, every step of the way!
What are some less talked about upfront fees associated with buying your first home?
Lender’s Mortgage Insurance (LMI): If your deposit is less than 20%, say hello to LMI. It’s like a safety net for your lender, just in case you can’t keep up with your loan. Think of it as the cost of playing the home-buying game with a smaller deposit. This doesn’t apply if you are part of the First Home Guarantee (FHG) or use a guarantor.
Legal and Conveyancing Fees: These are the backstage heroes of your property purchase. Choose to hire either a Solicitor or a Conveyancer, and they handle the paperwork and legal jargon to ensure everything’s good to go.
Loan Establishment Fee: This one-time fee sets up your loan. It’s like the entry fee for the mortgage club, covering everything from legal fees to home valuation.
Valuation Fee: Want to know what your dream home is really worth? That’s where the valuation fee comes in. It’s for that expert eye that sizes up your future home and tells the lender, “Yep, this one’s worth the dough.”
Stamp Duty: The big one. It’s a tax on your property purchase that varies from state to state. It can be a bit of a wallet pinch, but it’s all part of the home-buying dance, so save a spot for it in your budget.
Security Guarantee Fee: If you’re leaning on a guarantor for your loan, this fee covers the cost. It’s like the cover charge for that extra security backing you up.
Home Loan Fees: The nitty-gritty costs of your loan, from application fees to document prep. Each bank has its own line up, so knowing what you’re signing up for is worth checking before committing.
Rate Lock Fee: Opting for a fixed-rate loan? This fee locks in your interest rate, keeping it steady from application to first repayment. It’s like putting a reservation on your rate.
Documentation Fee: This is for prepping all those official loan contracts. It’s like the admin fee for getting all your paperwork shipshape.
*Please note, any information given to you by Simonds is general information only and will depend on your own personal and financial circumstances. We recommend that you make your own independent enquiries and seek professional advice from a qualified financial planner, bank or broker.
Hear from other first time builders and homeowners!
How Lauren and David Crafted Their First Home
Watch how the first home owners behind @sohihome brought their palette of greys, whites and blacks to life (and did so while sticking to their budget).
How Steven & Jacinta Got Their Own Slice of South Australia
With stunning coastal views to one side and rolling hills to the other, see how first home owners Steven and Jacinta struck gold with their single-storey Como 24 build.
How Michelle & Ryan Made Their First Home Dream a Reality
After juggling a new home build, planning a wedding and welcoming a golden retriever puppy into their family, it’s been a big few months for first home owners, Michelle and Ryan.
