Buying a first home may be exciting but have you ever thought about few points which need to be carefully considered from both financial and personal perspective to ascertain if you are ready.
According to the head of special projects at First National Bank (FNB) Housing Finance, Dr Simphiwe Madikizela, one should have a good grasp of the increase in expenses as well as the additional responsibility that comes with owning a property.
Here are six signs which indicate that you are on the right track to buying your first home.
Your income is consistent
You need to demonstrate that your income is regular and will likely stay that way. The bank will base the loan amount on the expected monthly income you receive.
You know how much you can afford
An affordability assessment is vital to the home loan process, as it will determine what the bank grants as the final home loan amount.
The bank will use your income as well as your credit living expenses to determine a final bond amount.
You need to have a good credit record
You need to prove to the financial institutions that you are a reliable customer with a low risk of defaulting. this is the best way to be granted good interest on your home loan.
You have budgeted for the increase in living expenses
Along with the bond repayments, your new home will come with an increase in living expenses. There will be expenses that are non-negotiable such as rates and taxes, levies (if your home is in a complex), water and electricity as well as homeowners cover insurance, which is required when you take out a bond.
You have a measure of savings
Home ownership does not come without its fair share of unexpected expenses. Unfortunately, as a home will always need attention and maintenance, as any issues tend to become worse, and more expensive if left for too long.
You are settled in your life
Buying a home is a long-term commitment and is not easy to sell a house, which may actually put you on a financial back foot if you have to sell in a relatively short period. So having confidence that you will stay in the same place for at least the near future is advisable.
