| Making the Transition from Rent to Mortgage
The “Great Australian Dream” is often associated with home ownership, and for many renters, it is a major goal. However, achieving this dream requires hard work and discipline as purchasing a house involves more than just a deposit and monthly mortgage payments.
There are several extra costs to consider when buying a house, including mortgage application fees (approximately $500), Lenders Mortgage Insurance (which depends on various factors), home insurance (around $1200-$2000 per year), pest and building inspections ($300-$800), conveyancing fees ($600-$2000), stamp duty (which varies by state and is often free for first home buyers), moving costs (which vary widely depending on the move), council and water rates (which depend on your location and the value of your home), home maintenance (which entirely depends on the property you have bought), and any improvements or renovations you plan to make.
As compared to renting, buying a house entails significant additional expenses. However, the upside is that you are saving while paying off an asset that will likely appreciate in value.
To achieve home ownership, you need to be structured, disciplined, and prepared, especially since it can be tough on cash flow, particularly in the early years. This is why it is not always easy to obtain a mortgage, especially your first one. It is crucial to have a financial buffer to fall back on for unexpected expenses and to ensure you never miss a mortgage payment.
One effective way to save thousands in interest costs is to pay off your mortgage a little faster. You can find helpful tips on how to do this in a separate article.
Being handy with tools and basic repairs and painting can also save you thousands of dollars in paying tradies. When things go wrong, you cannot just call the landlord to fix them.
One of the biggest benefits of purchasing a home rather than renting is stability. As long as you stay on top of your payments, you can remain in the same home for as long as you want. It is your own house, with no inspections, landlord rules, or leases – just a few extra expenses.
In conclusion, achieving the “Great Australian Dream” of home ownership requires hard work and discipline. There are many added costs to consider, but with proper planning, a financial buffer, and some basic DIY skills, you can achieve your goal and enjoy the benefits of stability and owning an appreciating asset.
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This is not meant to be financial or professional advice and is only of general nature. You must seek professional advice before taking any actions. The above information comes with no warranties whatsoever. We take no responsibility for any actions you may or may not take. All content is of general nature only and is NOT to be taken as advice whatsoever