Finally ready to take the plunge and buy your first home? Be prepared: With markets down and prices rising, this is a tricky time to do so. Tricky, not impossible. Your biggest challenge is that you’re probably bringing less cash to the table than the seasoned buyers. That doesn’t mean you’re completely out of the race though and does actually have a few advantages. You’re flexible for one. Since you’re not selling one property to finance the next, you can probably negotiate with the sellers who want to stay until they land their next place. Here are some pro tips for you as you venture into the housing market.
Start saving immediately
The earlier you start saving for that initial down payment, the easier it gets. The greater your deposit, the more attractive you are as a buyer and the more security there is in bank’s offering you competitive mortgages. Even if you aren’t quite ready to buy in the foreseeable future, you can put yourself in a better position down the line by stashing one or two thousand rand each month in a home fund. The bottom line: the sooner you start, the better.
There’s no need to rush things
There are a lot of factors to consider when buying a home. It’s likely that you’ve got a lot going on in your life – work, relationships, perhaps a child on the way. Don’t feel pressure to rush things. It may even be more beneficial for you to wait and prepare more.
Build an emergency fund
As a first time home buyer, it’s easy to get overwhelmed by all the hidden costs. The lawyer’s fees, larger utility bills, maintenance costs – they can all add up very quickly and make a huge difference to your bottom line. You want to be as prepared as possible. Over and above what you’re putting towards the home fund each month, ensure that you’re building an emergency fund too. That way the money will be there as a buffer when you need it.
Shop around for a bond
Don’t just snap up the first bond offer you receive from the first bank you apply to. Another bank might offer you a better deal. A reputable bond originator will apply to a myriad of banks for your home loan simultaneously, ensuring that you get the best deal at no extra cost to you, with less red tape.
Shop around for a home
Educate yourself on what the market’s doing and what’s available. When you’ve got a better sense of what’s out there, you’ll be able to make a more informed purchasing decision and may save yourself thousands.
Know the difference between occupation and possession
It’s not your house until the transfer is registered at the Deeds Office. Be careful about making any alterations or changing anything before this happens, as you could stand to lose a lot of money if the transfer falls through.
Don’t go furniture shopping
As a first time home buyer, it’s easy to forget that your new home will bring with it a whole new set of expenses that you’ve never had to worry about before. So, before you go out and grab those new curtains available at Homechoice or buy that new lounge suite you’ve had your eye on for a while, take some time to figure out what your budget might look like and what you actually need for your new home.
Repay as much as you can into your bond every month
Adding just 10 percent of your bond onto your monthly repayments can shave off years on your bond and save you thousands of Rands in interest. Try throw all you can into the bond. Any bonuses, profit sharing or additional income you might get can all go a long way towards making your life a little easier down the line.
Resist the urge to buy all the home that you can afford
This one’s really important and yet often overlooked. When you first apply for a mortgage, the banks may be willing to lend you more than you really need. While this might sound appealing, there are a lot of reasons that support buying less house than you can afford. For example, the lower repayments that come with having a smaller mortgage may be beneficial if you’re preparing to start a family or saving for retirement. A smaller home can also mean less money spent on maintenance or rates.