3 Things to consider when purchasing a home

Buying a home is not something you do on impulse - it often takes years of planning and saving to be able to achieve.

While you save and plan for your dream home, 3%.Com Properties have put together the three main factors that will impact your ability to afford a home:

1. Deposit

While there are some instances in which your bank might approve a 100% loan/bond with no deposit, it should not be your first option as this is scarce, and it might affect your interest rate negatively. Putting down a deposit of around 10-20% not only means you're closer to becoming a homeowner, but it will also reduce your monthly instalments and the amount you'll eventually pay towards interest on your bond. This means, you could pay the bond off sooner.

Not only does a deposit help with your monthly loan instalments, but there is also a better chance of the bank offering you a loan as a deposit lowers the bank's risk.

2. Additional once off fees

The initial fees involved in purchasing a home are not merely confined to the deposit and monthly instalments.

Other applicable fees include legal fees (to attend to the legal transfer of the property in your name), bond registration costs (only applicable if you take out a loan), and transfer duty (payable to SARS, which is only applicable to properties with a purchase price of more than R1 million). Make sure you are aware of these costs by consulting with your attorney or property practitioner before taking the plunge.

3. Monthly Affordability

Before purchasing a home, it is ideal to put together a budget of what you can afford by taking into account what expenses you have.

Consider all your monthly expenses, including existing repayments on debt (such as car financing, student loans, etc.) and make sure that you can afford the monthly bond repayments comfortably.

3%.Com Properties has an affordability calculator to assist you with a realistic idea of what you can afford.

A poor credit score will also impact your ability to receive affordable financing, as the banks might view you as not be able to make monthly payments. Your monthly bond repayments are not the only expenses related to property ownership either. You also need to consider the applicable monthly rates, taxes, and levies.

Another point to consider, is to obtain a pre-approval with a Bond Originator like Ooba; Better Bond; or GetGo Home Loans etc. These types of companies will provide an idea of what you can actually afford by assessing your financial information and credit score

Conclusion

At 3%.Com Properties, we are property experts and agents, and we have all the expertise and know-how to make sure you're aware of every little detail that might impact your home purchase. The best news is we only charge 3% sales commission when selling your property. Sale and Save. Guaranteed.

Contact us today!