Assess your affordability and credit history:
From the beginning of the home buying process, it is essential to ensure that you are house-hunting within the right affordability bracket. Banks calculate affordability based on disposable income after deductions and expenses. Your disposable income must be more than 30% of your gross monthly income for banks to approve a home loan. Let us assist you to do all the calculations. Your credit history will be assessed by the bank to ensure that when you’ve borrowed money, you’ve paid it back and that your credit history is clear.
Popular Top Tip 1: You can improve your chances of getting approved by getting prequalified. Pre-qualification puts negotiating power in your hands! This is a quick application resulting in a certificate which shows the type of deal, bond amount and interest rate you could expect to be offered when you apply for your home loan, prequalification allows the first-time home-buyer to know exactly what is affordable and to budget better for additional costs such as legal fees, transfer duties, bond registration fees, bank charges and insurance fees. When you are armed with a pre qualification certificate, you have the confidence to negotiate a better purchase price from the seller. Use your home loan wisely: Given current economic conditions, it might be wiser to weigh up the pros and cons of taking the maximum amount the bank has approved you for or to go smaller and make bond repayments more affordable. Avoid borrowing as much as you qualify for, as tempting as this might be, and rather take a long-term view, keeping in mind fluctuating interest rates and your available cash flow.
Popular Top Tip 2: Be sure that whatever you do, it's within your comfort zone. This is a decision only you can make. Honestly ask yourself: • Would you rather be conservative and fairly certain that you can make your bond payment without being stretched financially? • Is now the right time to be buying? • Is your financial picture looking healthy? • How does your credit situation look?
Maintaining a clean credit record: Once you have moved into your new home, make sure that you maintain good relations with your bank by making payments on time. Remember that the bank will hold you accountable for your home loan until you have settled it and the ownership of the house has been transferred to you.
Popular Top Tip 3: Put aside an emergency fund for those unexpected costs such as plumbing, tyre bursts and general maintenance costs. An emergency fund will prevent a situation where the home loan fund is used for other costs.
Popular Bonus Tip: Maintain the property regularly. “Regular maintenance allows for repairs to be fixed when they are still small, manageable and less costly”
DORIAN VINCE HARTZENBERG