Purchasing a new house is one of the biggest financial investments you’ll ever make, and no doubt you’ll have many questions regarding the process.
Are you ready to purchase your first home?
Before you set your sights on buying the home of your dreams, it is important to establish whether you are ready to make such a big, ongoing financial commitment – in other words, is your income stable and sufficient to support a first-time bond?
If you are secure in your job and earn a regular monthly salary, you’ll have a fairly good idea of whether or not you can afford to buy a home. However, if you are self-employed, your income may be unpredictable, making it more difficult to know for certain whether you are in a position to purchase. SA Home Loans’ experienced bond consultants will help you to verify your financial standing and calculate how big a homeloan you can afford and qualify for.
Also important to bear in mind are the costs and fees associated with purchasing your new home. You’ll have to have money saved for a deposit on the home and you’ll also have to consider moving costs, home-owners’ insurance and rates on your property. To ensure that you can afford the purchase, it is essential to calculate all your monthly expenses AND those involved in buying your first home. As a general rule, your bond repayments, together with taxes and property insurance, should not exceed 25% to 30% of your gross income.
In fact, a responsible lender will not approve a loan that exceeds 30% of your joint gross monthly income. It’s also a good idea to try to pay off other debt you may have (such as personal loans or credit-card debt) before applying for a home buyer mortgage.
Important factors to consider when buying your home
One of the most crucial factors you will have to consider when buying your first home is the type of house you need. While your first home may not be the mansion of your dreams, it is important to ensure that it meets all your current and medium-term needs. For example, a seaside bachelor flat may be an idyllic pad for a newly wed couple, but will it be a practical place in which to raise a family?
When purchasing a property, it is vital to consider your individual housing needs as well as those of your family – or future family! Is the home centrally located, or at least within a reasonable distance from your place of work, grocery stores, doctors, schools and pharmacies? Most importantly, is the area relatively safe and secure? Although you may get “more home” for your money in a less desirable part of your city or town, this may not be a suitable area for children to live and play in. The value may also not appreciate as it will in more sought-after areas.
Once you’ve decided which area you’d like to live in and have a rough idea of the type of home you want to buy, you’re ready to begin house-hunting. Although the process of finding a home is reputed to be a lengthy one, don’t be surprised if your ideal home takes only weeks to find.
Once you discover the home that’s right for you, it’s a good idea to snap it up and resist the urge to “shop around” for a bargain. When you find a property that is priced right and perfect for you, buy it.
Useful tips for first-time homebuyers
- Take a digital camera with you when house-hunting. Having photographs in front of you will help you recall specific details of each home you see – which is particularly useful if you’re viewing up to six homes in a single day.
- Write down key points about each home you see as you’re inspecting it. In particular, record its size, special features, design and other factors that may influence your decision.
- Take note of the area and its surrounds. Is the house close to all amenities, or is it in a remote location? Would you be happy to live in that particular neighbourhood?
- When you’ve narrowed down your options, ask to view the homes you like best a second time. This will help you to narrow down your options further.
Source: SA Home Loans