Before house hunting can even begin, buyers need to have a thorough understanding of what they can afford. It is crucial to develop an accurate picture of your income, expenses, assets, and liabilities (debts). If a buyer does not have a budget set up already, printing out three months’ worth of bank statements can prove helpful in this regard.
After evaluating your finances, decide how much you can afford to spend on bond repayments each month – keep in mind that owning a home comes with other monthly expenses that renting might not include, such as municipal rates and complex levies, for example.
Buyers should be mindful that buying a home does not happen overnight. It can sometimes take years of careful saving and/or paying down debts before you are in a position to buy. Once you start exploring the option of buying, questions usually arise around saving for a deposit and transfer duties (which can easily amount to hundreds of thousands of rand) v paying off other debts with their savings first to improve their borrowing capacity.
The answer to this will vary from person to person but, in general, it is usually better to pay down debts first if the person has limited cash flow. If the debts are at a manageable level that does not affect cash flow, then it might be better to put the money towards a savings account to build up a deposit and the necessary funds to cover bond registration costs and transfer duties.
Meeting a financial adviser and a bond originator can help buyers develop a plan that is tailored to their individual circumstances. Buyers then need to diligently stick to their financial plan and be patient while they build themselves into a better financial position.
- Shop around for the best rates
Once buyers are ready to purchase, Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, recommends getting pre-approval on a home loan before they start the house hunting process. This shows the seller that the buyer is in a serious position to purchase, which can increase the chances of their offer being accepted, especially if there are other offers on the table.
Involving a real estate professional can also speed up the process of finding their dream home, as estate agents are often privy to homes before they even hit the market.
RE/MAX
Tips to boost your chances of securing a home loan
It is crucial to develop an accurate picture of your finances
Image: 123RF
Before house hunting can even begin, buyers need to have a thorough understanding of what they can afford. It is crucial to develop an accurate picture of your income, expenses, assets, and liabilities (debts). If a buyer does not have a budget set up already, printing out three months’ worth of bank statements can prove helpful in this regard.
After evaluating your finances, decide how much you can afford to spend on bond repayments each month – keep in mind that owning a home comes with other monthly expenses that renting might not include, such as municipal rates and complex levies, for example.
Buyers should be mindful that buying a home does not happen overnight. It can sometimes take years of careful saving and/or paying down debts before you are in a position to buy. Once you start exploring the option of buying, questions usually arise around saving for a deposit and transfer duties (which can easily amount to hundreds of thousands of rand) v paying off other debts with their savings first to improve their borrowing capacity.
The answer to this will vary from person to person but, in general, it is usually better to pay down debts first if the person has limited cash flow. If the debts are at a manageable level that does not affect cash flow, then it might be better to put the money towards a savings account to build up a deposit and the necessary funds to cover bond registration costs and transfer duties.
Meeting a financial adviser and a bond originator can help buyers develop a plan that is tailored to their individual circumstances. Buyers then need to diligently stick to their financial plan and be patient while they build themselves into a better financial position.
Once buyers are ready to purchase, Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, recommends getting pre-approval on a home loan before they start the house hunting process. This shows the seller that the buyer is in a serious position to purchase, which can increase the chances of their offer being accepted, especially if there are other offers on the table.
Involving a real estate professional can also speed up the process of finding their dream home, as estate agents are often privy to homes before they even hit the market.
RE/MAX
‘Buying a house is not child’s play and you need to be prepared’
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Related articles
Latest Videos