Your ultimate guide to buying your first humble abode!
Are you thinking of buying property now that your family is growing or you’re thinking of getting a place for yourself? The idea of buying property can be quite nerve wrecking and overwhelming. It feels like a maze with landmines, and you want to make sure you make informed decisions that will benefit you in the long run. Well, fear no more! We’ve got a step by step guide on how to prepare yourself financially to buy your first home.
- Do you have a healthy Credit Score?
Ensuring that your credit score is healthy is the first step to putting yourself at an advantage to getting your bond approved. Sometimes people tend to be afraid of credit because they dread the idea of being in debt. However, applying for a credit card and ensuring that you repay your credit on time makes you more trustworthy to banks, agents and sellers. You don’t have to purchase extremely expensive items on credit, get things that you know you will be able to pay off quickly. This shows that you’re a responsible debtor and you are highly likely to meet your financial obligations towards the bank and the seller. You can also check your credit status by requesting a report from a credit bureau like http://creditbureau.co.za/.
- Assess affordability
You can assess your affordability by using an affordability calculator to assess what size mortgage you qualify for. This calculator considers your net income; total expenses, interest rate and the bond repayment method. Assessing your affordability will guide in you in choosing property that you can afford. You can calculate your affordability here; https://www.sahomeloans.com/calculator.
- Save for a deposit
A good deposit makes you a more attractive buyer to the bank and sellers. This increases your chances of having your bond approved as well as reduces your bond amount and the bond repayments. This will make buying your property cheaper in the long run because you’ll be paying less interest over the life time of your bond .
- Have you Prequalified for a home loan?
Prequalification can be achieved by submitting all the required documents needed for a home loan to a bank. The bank will then award you with a certificate that states that you are qualified for a loan. This makes you more attractive to sellers because they know you already have pre-approved financing.
- Don’t forget the additional costs!
Now that you have saved for your deposit and received your prequalification certificate, you would think you’re out of the woods, right? Unfortunately, not, the relatively small additional costs could make or break you. These include but are not limited to; the bond initiation fee, transfer duty, bond registration costs, conveyancing fees, bond repayments, municipal rates and taxes, insurance and maintenance. Preparing yourself for these costs will save you a lot of stress in the long run and reduce the probability of any surprises that you might not be ready for.