First and foremost, be well prepared. It is imperative that you be certain of what you can afford. Don’t even think about buying your first home until you no longer have debt. Organise your finances, have a good credit rating and make sure that you have enough money for a deposit, as it will help ensure that you qualify for a bond. A 10% deposit on the selling price of the home is standard best practice but remember that the more money you put in the beginning means that you will owe less.
Putting down a deposit puts you in a much better position to get your bond approved and may even gain you a better lending rate. The amount of credit the bank will give you depends on how much you earn, your expenses and the leftover disposable income you have in order to pay off your debt.
It is important to be aware that buying a home comes with a lot of “hidden costs” such as transfer fees, bond registration costs, rates and taxes, homeowner’s insurance and levies. Also, take into account expenses like moving costs, utilities and all other monthly expenses that you will need to be able to cover on a monthly basis.
The National Credit Act requires banks to review your gross income - 30% of which is allocated to cover home loan repayments and monthly living expenses.
Be sure to check with the South African Revenue Services that all your taxes are up-to-date as your property will not be registered if there you have any outstanding SARS matters.
It’s essential that you do your homework. You can never do too much research figuring out exactly what area works best for you. When deciding on a suburb, take into consideration all of the amenities that are important to you. Think about your commute to work and back, the educational and recreational facilities in the area as well as the safety factor. It’s also important to have a good idea about the property trends in the area because you want to be making the best investment. Also think about what your potential future may hold in terms of having a family and keeping the size of home that will best suit your plans in mind.
Working with a reputable agent is key. Having a professional working with you who has your best interests at heart, understands the complexities of the property market and who can help you negotiate the sale is of utmost importance. An agent will also be able to assist you with knowledge about the area you’re considering in terms of security, the proximity to shopping centres, public transport and schools. Your estate agent will also talk you through and help you understand your purchase agreement, letter of approval from the bank and any other documents you will need you will need to sign.
Once you have bought your dream home it is important to repay as much as you can into your bond every month as it will help you save thousands over your bond term. And, of course, remember to keep copies of all the documents and transactions relating to the purchase of your home.
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Take the nightmare out of moving with these simple tips.
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Damp warning signs to look out for when buying a new home
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With over half a century of expertise buying and selling properties, we understand it is more than just a transaction - this is your story - and we are honoured to write this chapter with you. Allow us to provide you with our expert knowledge on the Harfield, Lynfrae, Claremont, Kenilworth, Wynberg area, ensuring you have the most accurate information and support when buying or selling your property. Contact us on +27(0) 21 683 0731. We are here to ensure that you prosper through property!
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