With a reduced interest rate, high rates stock and of home loan approvals, if there’s ever a time to invest in a home, it’s now. While it may seem like a daunting process to navigate, preparing yourself will make all the difference. Here are 10 simple steps to take advantage of the property buyer’s market.
Establish your budget
Your very first step should be establishing how much you have to purchase a home and how much you are willing to spend. In order to qualify for a home loan, you’ll require a good credit score, which your bank or mortgage originator can assist you with. The consensus is that your bond repayment should not exceed a third of your monthly income.
Be prepared for a down payment
While first time buyers qualify for a home loan of up to 105%, you may need a cash security deposit of 10-15%. Investing your deposit is highly advisable as it brings the rate of your monthly repayments down and allows for an equity buffer of value in assets over liabilities.
Make provision for extra costs
Transfer duty, bond registration and conveyancing means you need to account for additional costs. For all home purchases over R900 000, there is a transfer duty cost. Don’t forget all the moving costs when relocating to your new home!
Be prepared for paperwork
Naturally purchasing a home means having to deal with a lot of admin, so it’s best to be prepared and get everything in order to alleviate any unnecessary stress. The paperwork required includes certified copies of IDs, marriage certificates (Ante Nuptial Contract where applicable), three months’ payslip plus 3 – 6 months’ current bank statements.
Decide where you want to live
The location you choose to move is vital as it should align with your everyday life as best as possible. Firstly, decide on the type of home you’d like to live in e.g. a house vs flat vs. studio loft, etc. Thereafter, decide the kind of area you’d like to live in and which qualities you prioritise in a neighbourhood. Narrow it down to a few and weigh up the pros and cons for each so that you make the decision best suited for you/ your family/ housemates.
Try searching for a home online first
Before going to open houses and viewings, have a look at potential homes online first to get a better look and feel of what you’d like in a home. Technology creates the huge benefit of online tours and viewings.
Hit the ground running
Make sure you mean business when viewing potential homes. Be extremely vigilant when going to viewings and look out for structural issues and poor maintenance before making any decisions. Should you want a home regardless of the future costs you will incur for fixing any issues, make the relevant negotiations with the owners.
Time for a home loan
A purchase offer is a legal contract which once accepted, requires you to secure a home loan. If you’re working with a real estate agent, they will assist you with this however you can attend to it on your own as well. The set of documents you were advised to gather before is now required. Once your bond is approved, it’s on to the next step!
At this point, the seller of the house will appoint a conveyancing attorney and the bank will appoint an attorney to handle the bond registration. At this point you will need to present the documents you acquired such as your ID, marriage certificate, payslips, etc. along with the deposit of the home where applicable and the transaction costs, which gets paid to the conveyancing attorney.
The conveyancer then prepares documents and makes the necessary payments in order to obtain a rates and service clearance certificate. Thereafter, the conveyancer lodges the documents in the local deeds office where they are inspected and once they are approved, the transfer is officially registered, which can take up to three months.
Getting ready to move
While waiting for the transfer to register, it’s advisable to prepare for the move. The conveyancer will inform you once the transfer is registered. If you are purchasing your home in cash, the title deed will be sent to you. If you are taking out a mortgage loan, it will be sent to the bank. Thereafter your bond repayments will commence and you can settle into your new space.