There are a number of extra costs you may not be aware of or have not budgeted for when looking at purchasing a property. Having a budget is an essential component of financial freedom and can help you realise the purchase of your first home. You must know what it is going to cost you to purchase a property and what all the associated costs are.
What is your budget? What can you afford? You must know the answer to these questions before going ‘property shopping’. You do not want to make an offer on your dream home to be let down when your affordability assessment doesn’t allow you to purchase the property.
It has been said as a general rule that your mortgage repayments should not be more than 30 per cent of your gross income.
Do Your Research
To obtain the best home loan to fit your needs, you must do your research. It would be beneficial to speak to a mortgage (finance) broker who can assist you with budgeting and working out what is your maximum affordability on a property. They can also assist you with calculating your mortgage repayment and can tell you how to reduce your loan quickly which should be your overall goal!!
Remember the Small Costs
Once you have arrived at this stage, you will most likely have a detailed list of expenses you will incur in your property purchase. There is nothing worse than feeling like you have forgotten something! Talk to your real estate agent and mortgage broker to ensure you have everything covered.
Here are a few small costs to include:
* Building and Pest/Termite inspections
* Bank Fees
* New furniture
* Settlement Fees