By Zuko Komisa
How do you move from renting someone else’s home to owning your own? Did you know that if done right, owning a house is a built-in Savings Account? The day you make your purchase you are essentially forcing yourself to start saving money, every month you repay your home loan, your equity grows. You also save a lot of money in the long-run, there are tax benefits and you can resell it for a higher amount in future. Some hints on how you can start owning your own property:
Do your research
There is nothing worse than making a costly decision that you are stuck with for over a 20-year period. It’s common to find that there are many first time buyers that get swayed by the anticipation of owning their first home and ignoring the crucial stage that is doing your homework. Every purchase is a massive commitment that requires the right amount of due diligence.
Save up for A deposit
Avoid the temptation of letting the bank pay the full amount of the loan without any contribution. It’s important to pay a deposit when you buy a home. This is mainly because you will have a smaller bond repayment to make each month and you will save on the interest repayments over the life of your home loan.
Will your property cater to your needs in future?
Take careful consideration of things that will affect your purchase in the future. Ask yourself the important questions: Will this area be where I want to live in 10 years? Is the home big enough for when I want to start a family? Will the value of the house depreciate avoidable circumstance? Lastly, do my current needs reflect a long-term view when making the purchase?
Mind your credit score
Credit score begins to be an important part of your finances when you start seeking growth and self-actualisation. As statistics would have it, around only one in four home loans get approved in South Africa because of poor credit records. Banks and other financial institutions take your credit record very seriously and so should you. Always make sure you understand how they work, check yours regularly and work on getting it as high as possible. A good credit score can save you up to 30% on your bond repayments.
Consider all costs involved.
There are many fees that you must be aware of prior to the sale, things like those dreaded lawyer fees, conveyancer’s fees for cancellation of his bond over the property, rates and taxes/levy and infestation clearance certificates and many others. Old houses have a tendency of hitting you in the pocket through ridiculous renovation costs. While you’re doing your research, find out the crime statistics in the area before buying, the cost of replacing your hard-earned goods is something you must watch out for.
Finally, many current homeowners have had varying experiences, spend time and chat with them. Find out what they wish they did right in the home purchases.