Buying your first home is a big and exciting step for your future. Check out these WalletWise tips and our step-by-step guide to take the stress out of buying your first home.
First, check what you can afford
Before looking at that first dream property, use a home loan calculator which will help you input your income and expenses. The last thing you want is to find your dream home and then you cannot get the loan to cover it.
To use a home loan calculator, use one of the online ones that does everything automatically and gives you an immediate answer. Once you’re on the loan calculator page, add your total monthly income and all your monthly expenses, like bills and groceries. Then let the calculator do the rest!
Now that you know what you’re able to afford, you are ready to go search for your dream home! Use local or online property guides to give you an idea of the homes that are available as well as the suburbs and areas where you can afford to buy. You may also use Standard Bank’s LookSee property guide
Know what you’re buying
Before you decide to put in an offer on a house, you should keep in mind the costs of running your new home from month-to-month. These costs can include:
- A levy and/or rates and taxes – If you live in a complex, you’ll need to pay a levy. This levy pays for the maintenance costs of the complex. You will also need to pay for electricity, water, and rubbish removal.
Levies can differ widely depending on where the house or apartment is located, so be sure to check the levy first and add that to your monthly expenses.
- Insurance – Another very important monthly expense to keep in mind is insurance. You will need both building insurance and home contents insurance. Some financial institutions also offer home loan protection plans.
WalletWise tip: If your property is part of a sectional title, you will see that the building insurance makes up part of your levy. However, you will need to take out other insurance for your possessions like electronics and furniture.
Once you find a home that you’re interested in, you have to make sure that your future home is in a good state of repair. This include the structure, wiring, pipes or evidence of damp, faulty electrical, plumbing or gas installations or any renovations.
There are a number of extra costs that you will need to pay when buying your new home. These costs cover administration and registration and include:
- The deposit that you will put as a downpayment on the house. The deposit is usually 10%.
- Transfer duties to put the property on your name.
- Conveyancing fees to ensure that all the paperwork are completed correctly and is given to the right departments to file.
- Deeds registration fees to make your buying of the property legal and binding.
Putting in an offer on the home
Okay, so you’ve found your new home and it is in good repair. Now it’s time to put in an offer on the property. This is called making an “offer to purchase”. This offer to purchase is very important and is legally binding. There could be penalties that you would need to pay if you don’t go through with the offer.
Once you’ve given the offer, the seller may choose to accept or reject your offer.
Get your paperwork in order
Once the seller has accepted your offer to purchase, you can go ahead and complete your home loan application as soon as possible. It helps to keep a list handy with all the documents that you need to supply when doing the application. This list is available from the financial institution where you are doing the home loan application.
Once your loan is approved, the payment for the house can be made. All that is left after approval, is to complete the paperwork, do the payment and then you can start packing! Contact a reputable moving company to help you move your possessions safely from your old home to your new home.