Is this the best time in more than a decade to buy a home?
If you’re a first time home buyer – it might just be…
There is good news and excitement for first time home buyers who are able to enter the market. The current bond rates are at a low of 7.75% which South Africa hasn’t enjoyed for many years.
Selective financial institutions are currently extending the threshold of 100% – 105% loans to cover the registration and transfer costs. We have seen a shift in the market, especially with new buyers. The 100% approval rate and the lower interest rate from financial institutions are a major drawcard to first time home buyers.
Having said this, when buying a property it is important to work out your budget to ensure affordability should there be any change in the factors that determine the interest rate. Consider additional costs for maintenance and incidentals and utilities.
My advice to first time home buyers are as follows:
- Choose a real Estate Agent that is going to serve your best interest and not only sell to you.
- Get your credit score into the best shape possible and ensure that you never miss payments on the accounts you have. If you are having trouble meeting payments speak to your financial institution they will work out a plan for you.
- Determine how much you can really afford, bearing in mind when you take ownership of your property there are always going to be extra costs for repairs and incidentals.
- Know the total costs involved in the property you have purchased, for example, occupational rent (should you move in before registration), alterations, painting, rates, levies, transfer and registration fees.
- Get pre-qualified for mortgage finance; this is a sure way to strengthen your bargaining power.
- Do thorough research before you start viewing a property, including; recent trends, local amenities , traffic and access to main roads, schools, public transport and security.
- Get a specialist to look for structural defects in the building should you have concerns and request the seller to sign and complete a condition report on the property.
- Understand the offer to purchase with conditions fully before signing it. The offer to purchase is a legal, binding document and you could get yourself into a lot of financial trouble if you are in breach of it.
Refer to the Bond Repayment table as well as the Affordability table below to help you with your purchasing decision.
I hope the above information will be of value to you and assist you in making your decision. Should you require any advice or assistance in finding your dream home in Port Elizabeth, please contact me on 082 600 1764.