Canvassing and viewing a few homes in different areas will help you to know exactly what type of property you can afford. It's not
only the home loan instalment you'll be paying. You need to factor the additional costs which come with owning a home, such as bond
and transfer fees, insurance and municipal costs into your budget.
What costs to factor in
Ask your property sales advisor for
help to ensure that you are aware of the process and all associated costs. You can also contact your affiliate bank for a pre-approval,
so that you know which amount you would qualify for, as this will also assist in your home search.
One of the biggest mistakes some
homeowners make is to forget about the cash funds needed to buy a home. Only after the contract has been signed and loan approved,
when you start receiving invoices from the attorneys, do you realise that you will need additional funds. This could put a damper
on the excitement of owning your own property.
When working with a reputable real estate agency, your sales advisor will be trained
and qualified to provide you with all the information you need beforehand, preventing such situations.
Depending on your financial
situation, some of the home loan products out there allow you to qualify for a larger loan, eliminating the cost of paying a deposit,
but others require the security of investing by having an upfront amount.
Also, be aware of other once-off costs that you will have
to pay, over and above the deposit. These include initiation and administration fees, legal costs, bond registration fees and VAT
or transfer duty.
Making the offer
There are a number of factors to consider when determining the initial amount to offer on a home,
such as sale prices of similar houses in the neighbourhood for the past year, as well as the current market situation. This will give
you a good estimate of what you can expect to pay.
Your property sales advisor will assist you with this information and advise you
correctly to ensure you make the right choice. The general condition of the house is also an important pricing factor.
concerning things that need to be done in or around the building must be taken into consideration when making an offer.
If your decision
has been made, it's time to sign an offer to purchase with the seller and to complete your home loan application.
Applying for a home
When applying for a home loan, you will need the following documents at hand:
A signed offer to purchase.
- Proof of income.
South African bar-coded or Smart Card identification document.
- Proof of current residential address, such as a municipal account, Telkom
account or valid TV licence.
- Salary earners need to include a recent salary slip.
- Bank statements of the last six month.
Once you have
all your documentation, the approval process begins, and you will receive an approval in principal (AIP), this usually takes five
to seven working days.
Although the bank might have granted you an AIP, they will still need to arrange an appointment with
the seller in order to go out and do a full valuation of the property being purchased. This ensures that your investment is sound
and that your home choice is at market value.
The transfer process
Once the home loan is approved, the bank instructs
the bond attorney and transferring attorneys to start the administration process. Herewith a summary of the process, which your new
home will undergo before it is officially transferred to your name:
- Title deeds and cancellation figures are requested from the bank
currently holding the home loan.
- A rates clearance certificate is requested from the local authorities and municipality.
- The bond attorney
contacts the transferring attorney and advises the amount available for guarantees.
- They then request the draft transfer deed and guarantee
requirements. The cancellation attorney is requested to cancel the seller's home loan on receipt of a guarantee for the outstanding
- Once the transfer attorney has received the title deed and cancellation figures, the buyer and the seller sign the transfer
- The buyer pays the transfers costs to the transferring attorney.
- The bond attorney prepares the home loan documents which
the buyer signs together with paying of the fees.
- The bond attorney lodges the documents at the Deeds Office.
- The Deeds Office receives
the documentation and checks it before being registered.
This process can take up to three months, sometimes longer, from the date
of approval to transfer, depending on each municipality.
Before the home loan is officially granted, your financial position
and credit record will be checked again, and the bank will pay out the loan on the day of registration. Once the legal documents are
signed, the transfer fees paid and the sellers receives his or her money, the deed is done..
Paying off your home loan
do not end here as it is important to maintain a good credit record for any future home loan applications or loans, and you have to
make your home loan payments on time.
It is vital that you do not miss a single monthly repayment, as the interest owing on the loan
will increase and you'll end up paying more than necessary.
Debit orders are a good way of preventing late payments. If you have trouble
making payments, inform the bank as soon as possible.
One could always try boosting your monthly instalments, to benefit from great
savings on interest and pay off your home loan as quickly as possible.
Remember that property has always, and still remains your best
investment and the benefits of owning a home are well worth the effort.
Although this might seem like a lengthy and complicated process,
your real estate agent is there to assist you with each step.
Article by Property 24
Inspected once, Inspected Right!®
If you're in the market for a home or an investment buy, this is an exciting and big decision, remaining one of the biggest decisions
of your life.
Where to start
You must do your homework first. Numerous estate agencies have open houses in various areas every weekend,
and some even during the week. This will help you get a feel for the size that suits your needs and will help give good insight into
your choice of area. Think about accessibility to work, public transport, schooling and other amenities.
Keep in mind that location
is of great importance, especially to secure your investment for the future, and, in fact, will also have an effect on your loan approval.