Getting a foot on the property ladder means being financially savvy and knowing what financial mistakes to avoid. Whether you are looking for ways to secure your first home loan or already have a deposit ready, it's important to keep these four tips in mind when buying your first home.
Know what you can afford
You may have your dream home mapped out in your mind with the best features that will be suitable for your lifestyle. However, knowing what you can afford can make the financial aspect slightly easier for you. The average price paid by first-time home buyers in South Africa is between R1.12 million to R1.138 million. A general rule of thumb is to have at least 10% - 20% of the value of the property you want to be saved to improve your chances of having a home loan approved or even getting access to a better interest rate.
Take advantage of low interest rates
Keeping a close eye on property market trends through research or an estate agent can help you land great deals in terms of pricing for your home. It can also be beneficial when it comes to improving your finances to get a better interest rate on your home loan. Purchasing property is a giant step that anyone will take financially. Make sure to pace yourself to land your dream home at an affordable price.
Be mindful of the property location
Buying a house is a long-term investment. Keeping the big picture in mind when purchasing property can bring you a better return on your investment. It may be tempting to settle for an affordable property in an area that will not increase the value of your property. However, this could come back to haunt you when it's time to sell. Choosing a property that is located near amenities and is also close to things such as schools and workplaces can be a good return on investment. Checking the property trends of an area you are keen on buying a home in can also be the deciding factor on whether it will be a worthwhile investment for you.
Consider the additional fees that come with buying a house
Understanding the additional costs that come with purchasing a house can lead to surprises that could see you stepping outside what you can afford. You will have to factor in the conveyancing fees, transfer duty costs, deeds registration fees, moving costs, and home inspection costs to make sure that you are not purchasing a house that will be burdensome. The ongoing costs such as levies, rates and taxes will have to be budgeted for to see if you will be able to afford the long-term upkeep of your home.
