6 April 2016
Purchasing a home is something that most adults aspire to do. However, the actual process, steps, and financials required are often not openly discussed, leaving you in the dark.
It’s important to be familiar with what is required from you and what precautions you can take, to ensure that you qualify for a home loan.
By reading through this first-time home buyers guide, you’ll have an idea of what’s in store for you.
Before you begin house hunting, it’s important to know what you’re looking for in your home by making a personal checklist. This list should incorporate the needs of each member of the household. You should ask yourself:
Additionally, you should also make a list of your new expenses that are going to come your way. Besides paying your monthly bond, you’re also going to have to pay for:
In doing so, you’ll be able to estimate your budget required to own your home.
Mortgage technically means pledge or promise, as in, you ‘promise’ your property as security to the lender, should you not be able to pay back the loan. Affordability of a mortgage shouldn’t be more than 25%-30% of your regular family income, before tax deductions.
Using a SA Home Loans’ free online calculators, you can determine how much you can afford to spend on a home using your gross monthly income.
The paperwork involved when purchasing a property is called a title deed. This document specifies the location and size of the property and the particulars of the owner.
The majority of first time home buyers will purchase a freehold ownership. But, just like there are different types of properties to buy, there are several types of home ownerships available to purchase, each one with their own legalities:
First time home buyers are often thrown off course at surprise information. That’s why it’s important to remember that with every home bought, there are additional expenses to consider:
These amounts depend on how much your home is worth. And it’s also very important to not forget about the interest rates you’ll be paying back too. As SA Home Loans offers a transparent service, your lender will be happy to provide you with a breakdown of these costs.
Once you know how much your loan can be, you can go and search for a home that meets your criteria and budget. Be sure to use a reputable estate agent, as they act as the liaison between the you and the seller.
Remember, these prices are negotiable, so don’t be afraid to make recommendations of your own to the estate agent. And, be sure to have a professional home inspection company review the property for you to ensure it’s in good condition.
Before you sign anything for the property, be sure to visit it several times and ask as many questions as you like to the estate agent. It’s a huge investment and you wouldn’t want to find any defects when it’s too late.
Once you know that you’ve found ‘the one’, the estate agent will draw up an ‘Offer to Purchase’ document, which contains the:
It also includes the occupational rent terms, which is a monthly amount paid by the seller to the purchaser, should they wish to stay longer on the property, after the registration of sale.
If you plan to take out a home loan, the “Offer to Purchase” must include a condition that the sale is subject to bond approval being obtained within a realistic amount of time i.e. 7 – 10 working days. Once you have confirmation that your loan has been approved, you must notify the estate agent immediately to ensure that your offer becomes unconditional.
This condition is very important, because if you are not able to secure finance, the “Offer to Purchase” will terminate and become null and void, and neither you nor the seller will be liable to pay any costs or penalties.
Once you have signed the papers, turn to SA Home Loans to apply for your bond. Besides being professional and experts in the field, we also don’t penalise applicants for being first time buyers.
It’s important to disclose your true state of affairs, so that the lender can make a true assessment of you. Additionally, you must remember that when you choose a reputable lender, they must:
Once all the conditions of the contract have been met and the deposit paid, the next process is the transfer of the property into your name and the registration of the Mortgage Bond at the Deeds Office. The Conveyancing Attorneys handle this part of the loan process and will contact you when the documents are ready to be signed.
The seller must provide you with an Electrical Clearance Certificate, as well as a document stating that the property is pest-free. These conditions may vary depending on which province your property is situated in.
This process can take up to 10 weeks without delays. But, once it’s done, the property is legally in your name, which means from that date onwards, you are responsible for the payments and maintenance.
For a reputable lender and thought leader in the industry, turn to SA Home Loans. Not only do we offer competitive interest rates, but as we’re solely focused on mortgages, you have our undivided attention.