5 things first-time home buyers should know
JOBURG – Ready to buy your own property, here are the five things you need to know before making that decision.
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JOBURG – The owner of My Bond Fitness and a property conveyancing attorney, Meyer de Waal, has given some advice that first-time home buyers should know before signing on the dotted line, and given that buying your own home can be a daunting prospect.
Become an expert
Meyer suggested that first-time buyers should research the housing market extensively, compare properties in their desired locations, and also get a Comparative Market Analysis (CMA) to compare the price they are being asked to pay with other prices in the same neighbourhood.
A good agent will assist with sales trends and comparisons of apples with apples in the area using systems such as PropStats by the Institute of Estate Agents of South Africa (IEASA).
One of the exhibitors at the Property Buyer Show, Lightstone, provides buyers with a website where they can obtain a CMA on the property they are interested in.
Check your credit score
The major stumbling block in most property sales is financing, with only one in four home loans being approved.
Your credit score plays a huge role in this decision. It will determine the rating the bank and other financial institutions give you after examining how you have handled credit in the past.
For a quick and free online check go to www.mybondfitness.co.za or the Credit Bureau online.
Read: Efforts to ensure property buyers do not inherit historical debt
Size matters
Check your affordability.
This takes into account your income and expenses, working out the size of the loan you could potentially get from the bank.
And knowing how much you could possibly borrow makes the entire process far simpler.
“Most agents will show a client several houses before they decide on the one they really like,” Meyer explained. “After the potential owner has decided, the agent goes about running all the necessary checks, including their credit record and what they [can] afford.”
Budget before you buy
Before you think about buying a home, take an honest look at your finances.
Replace your monthly rent with the potential bond repayments, as well as costs such as house insurance, rates and taxes, levies and property maintenance.
All these costs add up and could put a strain on your monthly income.
There are also plenty of personal budget apps such as Mobile2Budget, which make controlling your finances much simpler.
Also read: TALKING PROPERTY: 10 things you should know when buying
Working hard for your money
A full-time employee with a regular pay cheque is a far more attractive prospect for any lending agent than someone who is self-employed or commission-based.
If you are self-employed or work for commission, contact a home loan consultant before you consider buying.
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