Few things in life can compare to the joy of finally crossing the threshold of your first home. If you are like most of us, you have been dreaming of this day for years and years – it has finally arrived!
The financial bonus of course is that you have probably just made one of the most important investment decisions you will ever make.
Here are some guidelines to help you make a wise decision on both counts -
Step 1: What’s your price range?
First step is to work out what price range you are looking at, and that’s a function of deciding how much you have on hand and how much you will be able to pay every month for the privilege of owning your own home.
And whilst it’s always tempting to over-commit yourself, over-confidence as to how far you can stretch your budget is a mistake likely to end in tears. So keep reminding yourself to be realistic when you work out what your new monthly costs will be.
Checking your credit score at this stage will also avoid any unpleasant surprises when you come to apply for a bond.
What will your monthly costs be?
When you first apply for a bond shop around for the best interest rate and, with rates already starting to rise again, be absolutely certain that even if interest rates do at some stage return to the high levels we have seen in the past, you will always be able to afford the monthly repayments.
Get a bank pre-approval here - with today’s restrictions on credit grantors when it comes to responsible lending practices, it will help you gauge affordability. And as a bonus, it gives you a great negotiating tool when you move on to the offer stage!
When budgeting for home and garden maintenance costs, include a provision for long-term expenses like repainting, roof repairs and so on.
How much cash will you need upfront?
Transfer Duty is payable at the following rates on transactions which are not subject to VAT: Acquisition of property by all persons:
Source : National Treasury
Step 2: House hunting!
You know your price range, so on now to the really exciting part of all this – finding your dream house.
Here’s a checklist to get you started -
Step 3: Putting in your offer
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Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
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