Buying a house is an exciting time; you finally have a place to call your own and you can start building a life there.
Your Pinterest boards are probably full of home décor, DIY, and storage boards that will make your new place look like something out of a magazine. You’ve worked out how much you can afford, budgeted to a tee and are ready to dive right in.
Before you do though, here are three things that you might not have considered as a first time home buyer. Be a smart buyer, do your research, and don’t let anything catch you off guard.
It’s not just the monthly bond repayment that you have to be aware of when figuring out what home you can afford. There’s also rates payable to the municipality, as well as levies if you’re living in a complex or secure area. Plus then there’s your electricity and water to consider.
On top of this, there’s some ‘hidden costs’ which often take buyers by surprise. If your new house costs over R900 000, you will have to pay transfer duties. This is a tax levied by the government and is unavoidable, unless you are buying from a VAT-registered vendor (normally the case when you buy ‘off plan’ in developments). The transfer costs vary as they are calculated as a percentage of the value of the house.
Transfer duties are not to be confused with transfer fees, which are professional fees payable to the attorneys responsible for registering the property under your name. Bond registration costs are also paid to the attorney who registers the bond.
Look at one of the many bond calculators to figure out these costs so that you’re not left scrambling to try and get some money together when crunch time comes.
Remember that taking out life insurance is often required when you buy a house in order to make sure that the bank’s risk is covered. Even in instances where life cover is not needed or where only minimal amounts are needed, now is a good time to think about your insurance requirements.
Assuming you’d want your family to be able to maintain their lifestyle and live in the same house if you were to pass away, life insurance is something you should be looking into. If you’re upsizing and planning on starting a family, it’s even more important to plan for the future. Or, if you’ve just moved into a new house because you’ve got married then you likely have a spouse to consider for the rest of your life. Life insurance can act as income replacement or help to support family members who are left behind.
Have A 5-10 Year Plan
When you buy a house, you’re probably going to live in it for a few years. The house might need to see you through significant life changes, so keep these in mind when you’re house hunting. Though you can’t know exactly what the future holds or plan with complete certainty, you should be able to keep some likely possibilities in mind and try to plan for them as much as you can. Try your best to find a house that will be suitable for the future you predict so that you won’t have to repeat the process three years down the line.