BEST ADVICE FOR 1ST-TIME HOME BUYERS
Category Advice
Ready to buy your first home? It's a super exciting time. There are, however, a few legal and personal steps you need to take along the road to homeownership, and if you get those right, your goal is well in sight.
Affordability is key. "A buyer who can exhibit the financial discipline to save for a sizeable deposit, is considered a safer bet than a buyer who has not been able to save for a deposit at all." While, no one is suggesting that it's easy to save up for that deposit - a minimum of 10 to 20% of the total purchase price -the bigger your deposit, the better your chance of getting approved for the value of the home loan you request, and often, the lower your interest rates on that loan will be.
Don't worry, though; not having a deposit doesn't mean the door to homeownership is closed. There are 100% home loans available for first-time buyers, provided you meet specific criteria. Additionally, there are various alternate financial products at your disposal. We recommend discussing these options with a trusted property practitioner.
What exactly is a bond originator, and what do they do?
Let's consider ooba homeloans as an example. They not only provide expert advice without any cost to you but also take care of your loan applications with multiple banks on your behalf. Given that different banks have distinct lending criteria, a service like ooba homeloans, which offers a comparative approach, can help you navigate this process effectively. Their online platform is a treasure trove of valuable advice and financial tools, equipping you with the information you need to make well-informed decisions.
What can you afford?
Starting your homeownership journey is an exhilarating experience, with affordability as the key consideration. Like most individuals, you'll likely require a home loan. While your salary and income play a significant role, there are additional factors to consider. Fortunately, the application process has become much more convenient online. To increase your chances of success, here are a few essential steps to take.
Begin by sitting down with your finances and take a thorough look at what you can comfortably afford at present. Keep in mind that while our current bond rates are stable, the future remains uncertain, and factors like fuel or food prices and school fees may change. It's wise to build in some flexibility. Create a financial spreadsheet outlining all your expenses and identify areas where you can trim costs to accommodate your monthly home loan commitment. By using the various calculators on Wakefields, or ooba's you'll gain insight into your property budgetary limits. This will empower you to make informed decisions and set a realistic financial goal for your dream home.
Don't forget when doing your calculations, that there are other not-insignificant one-off expenses associated with a home purchase - bond registration, transfer fees and transfer duty (this latter figure paid to SARS, and only on properties worth over R1 million). These, too, can be calculated on our website. It is sometimes possible for these costs to be included in the home loan you're granted - speak to ooba or your property practitioner for a more tailored solution.
Your credit rating - this is critical to your home loan application.
Each of us has a credit score, determined by our financial history, including our interactions with store accounts and outstanding debts, among other factors. This score is represented as a three-digit number ranging from 000 to 999, and it's a metric that the bank will certainly examine when you apply for a home loan. A higher credit score enhances your chances of securing loan approval, with scores above 600 being considered good and those exceeding 670 deemed excellent.
When you choose to apply for a home loan through ooba, you not only learn your credit score but also receive guidance on how to enhance it. This can prove to be a pivotal factor in your house-hunting journey, potentially opening doors to more favourable loan terms and opportunities.
Pre-approval. What is it?
It's pre-approval for your home loan, so you have a piece of paper notifying everybody that, under your current circumstances, you're eligible for a loan of X amount. Get one before you start looking for a property. That means when you're shopping for a home, you know precisely what you can spend. Most importantly, it tells your property practitioner and sellers that you are a legitimate, serious buyer. Preapproval has become extremely important, and it gives you a head start over other buyers.
If you haven't already found yourself a property practitioner in the area in which you intend to live, this is a good time. Creating a connection with a trusted professional can make a world of difference to the search - they'll understand exactly what you're looking for, know how much you can spend, and be able to analyse your specific needs.
When embarking on the journey to your first home, it's perfectly normal not to tick every box on your wish list right away. Remember, this is just the beginning of a lifelong adventure in homeownership. You might start with one vision but end up with an even better one. Your property practitioner is a valuable resource, knowledgeable about various areas and future developments, and the entire home-buying process.
Keep in mind that asking questions is essential. It's the best way to become well-versed in the sometimes-complex documentation required for property purchases.
So, stay curious and engaged in the process - your dream home may be closer than you think, and every step forward brings you one step closer to realising it. Do your homework. Drive around the areas you like. Look at the security, the potential noise levels, the playground for the children. If you can combine your own research, with the experience and skill of your chosen property practitioner, chances are really good you're going to get the best buy for what you can afford.
Author: Haydn Wakefield
