When considering purchasing property, it is a simple matter to calculate your bond repayments and see whether or not your savings will cover the deposit that most banks will require before issuing a bond. But many people forget that not all of this money can be used for the deposit.
There are many other costs, including transfer costs, transfer duty, bond registration and moving expenses, which you must pay before you can move in. You will also have to budget for the services deposit that is payable to the local authority, as well as levies due to the body corporate if you are buying into a sectional title scheme.
Thereafter, you’ll need to consider the monthly security, rates and services costs, home and contents insurances, and a life policy (which is often required by banks when granting a large bond amount). If you are moving from a small home, you’ll also probably need to buy household goods such as kitchen appliances and garden equipment, and curtaining.
Don’t fall into the trap of thinking that bond will be your only new expense. Owning property is a costly investment with ongoing associated costs – but one that offers far greater financial security than renting. And there’s no better time than now to get into the property market.