Buying your first home is a big deal. There are so many things to think about and so much that you don’t know, that it can be intimidating.
We’ve demystified the process and broken it down into 6 easily understandable steps to help you on your way to becoming a proud home owner.
The Road Map to buying your first home
Find out more about what you need to know about home loans, property search, conveyancing and more.
1. Getting Your Bucks in a Row
Here’s what you will need to do to get yourself ready to take on the financial commitment of a mortgage.
- Make sure your credit history is healthy
- Build up your credit score.
- If you don’t have one, you should apply for a credit card, as this aids your score.
- Check your status by getting a free credit report from one of the credit bureaus.
- Pay all your bills on time, every time.
- Clear as much of your debt before applying for a home loan.
- Save For a Deposit
Why you should save for a deposit.
- Higher chance of getting your bond approved.
- Smaller bond, the amount owed is decreased so you save on interest paid over the loan term.
- A deposit means your bond repayments will be lower. As a general rule, your monthly bond repayment should not exceed 30% of your gross monthly income.
- You’re in a better position to negotiate an interest rate since there is a lower risk for the bank.
Assess Your Affordability
- Before you start looking for a property you need to have an idea of what you will be able to afford.
- You can use an affordability calculator to work out what size mortgage you can qualify for.
Beware the Additional Costs
There are a number of additional costs that are incurred when buying and taking ownership of a house and these may come as a shock to a first time buyer.
2. House Hunting Tips
Some things to take note of when you are house hunting include:
- Your budget – be realistic about what property you can afford.
- Your needs – property is a long-term investment. So, consider your present- and future needs.
- Your lifestyle – find a neighbourhood that offers your desired lifestyle. Is it run down or experiencing a lot of development? Is the property subject to a lot of noise?
- Security – how safe is the property? Is crime in the area under control?
- Proximity – to healthcare, schools, work and shops.
- Your space – the minimum number of bedrooms, bathrooms, parking bays and garden space that you need.
- What will it cost to secure your pets? Are your communication needs met? Consider all other initial costs of operating your household.
- Property type - do you want to live in a freestanding house, a flat or in a complex? Is the complex well run and maintained? How much are the Levies? What are my restrictions?
- Maintenance – do you have the time to maintain the garden and pool?
- Cost of renovating/redecorating – how much work does the property need? Can this be achieved without breaking the bank?
3. Doing the Deal on a Property
A quick checklist when completing an offer to purchase:
- Check that the description of the property is correct (as described in the title deed).
- Are all the buyers’ and sellers’ details documented clearly?
- Check that the purchase price is written correctly.
- Are you happy with the occupation date and occupational rent amount?
- Make sure you are aware of any special conditions and the time period in which these conditions need to be fulfilled i.e. that the agreement is subject to a grant of the buyer’s bond, or the sale of his other property.
- There may be movable items that can stay with the property. Are they all listed and are the movable items, which are not included in the sale, listed?
- Check that the estate agent’s commission is correct (as agreed upon).