First-time home buyers get savvy tips
JOHANNESBURG – CBA offers savvy advice to first-time home buyers.
The Credit Bureau Association (CBA) is offering advice on a few important things potential homeowners need to consider when looking for the house of their dreams.
The association’s executive manager, Jeannine Naudé Viljoen explained that, while the process of buying your first home can be daunting, it is one of the biggest investments one can make and requires realistic, responsible planning.
This realistic planning includes understanding the loan process and knowing one’s credit report, as well as proper budgeting. “We all dream of the perfect home, but without careful planning and budgeting, the home-buying process could be a nightmare. Forewarned is forearmed – so start by doing your homework,” she cautioned.
Speaking of the loan process, Naudé Viljoen advised consumers to ensure they have the necessary documents when approaching a loan provider, and this includes proof of income and expenses, as well as three months’ transactional bank statements. This, she added, was all part of the National Credit Regulator-mandated affordability assessments, as part of promoting responsible lending.
“The loan provider will then decide if they want to offer you a loan and for how much; this is based on their own appetite for risk and internal processes and also on the verification that the credit report, which they will seek your permission to access, gives them,” she said.
Secondly, Naudé Viljoen urged consumers to know their credit score, which provides the loan provider with a credit history. This can be accessed, free of charge, each year from five credit bureaux listed on the CBA’s website.
Lastly, consumers looking to buy a house are urged to budget well, which means realistically capturing of your income and expenses. “We also recommend you give yourself some ‘wriggle room’, just in case the interest rates increase or your living expenses change – such as when your family starts to grow, and don’t forget to factor in rates and taxes, or levies in an estate.”
More advice from Naudé Viljoen:
- Save up for a deposit to reduce your overall debt
- Pay any initiation fees up front with cash, rather than through debt
- Pay in more on a monthly basis, which can either be withdrawn and used later (through an access bond) or go towards shortening the length of your bond agreement.
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