So as a First time home Buyer, if your thought process is that you only need the 5% Deposit for the Bank, and a Possible extra amount for Paying LMI upfront, you are dead set in for a surprise.
My breakdown of Cost's before being Fully approved are as Follows.
- $1000 Land Holding Deposit (You get this back after paying Builder Deposit)
- $5000 Building Deposit to start the Contract phase for Construction Quote (This comes off your Final Tender price)
- $2600 Conveyancing Fees
- $5000 Land Deposit to start Exchange (Plus 10% of Entire Value before/On Settlement)(Also comes off the Purchase Price)
- $3500 Landscape Design Bond (Paid on Land Settlement, you get this back later)
Then you will still need your 5% Deposit for the bank, and the LMI difference.
It's no wonder most first time home buyers buckle as they enter this process, because none of the above was a thought pattern of mine before heading into this, bah saving the basic 5% and LMI.
And let's not forget the unknowns for Rock Removal or Retaining walls that might come up during your build.
I am sure there are a few more cost's heading my way, 1 of which might be a security bond for the 10% upfront on the land, it's a 1.2% fee on the 10% deposit so I am only looking at around $300-$400 for this.
However it's an additional step I didn't for-see.
Let's hope over the coming week my front page land contract get's to the bank, and they approve the Land Loan to assist with the 10% Deposit needed.
All I can say at this point is wow!!! We are managing this, but it's juggling alot in a very short amount of time.
We were in the same boat a few years ago Jeff when we decided to build. I spoke to my accountant back then and he said to pay off our current house and make sure you don't pay mortgage insurance as it is dead money. I'm glad I listen to him as here we are now, house payed off and 20% deposit. Still it's very stressful and I feel for younger people trying to own a piece of the 'Australian dream'. We were lucky with landscaping as we didn't need to have a plan thus no bond. Good luck with your valuation. Also watch your piering. We allowed 50 lineal metres and came in at 89. An extra 3.5K to find for the final payment. All part of the fun of building a home.
ReplyDeleteRegards,
Dean & Leeann
Hi Dean & Leeann,
ReplyDeleteYeah it has been very interesting so far on this Journey, Luckily for us with the house and land package, if any additional piering is needed, it falls under the Builders cost to cover, so that cost I don't need to worry about thank god.
At least with the Landscape Trust, we get that back to spend on the landscaping which is good in 1 way, as it gives funds to actually put toward getting turf etc.
Thanks for your input, and thanks for following the blog.
Take care.