Knowing the journey you need to take to buy your own home is integral to being completely prepared.
From the moment you decide you want to purchase a property to the day you move into it, there is much that you need to do.
Here are the 12 steps you need to take on the journey to buying your first home, outlines Buyisile Maseko, former growth head of FNB secure lending cluster and home finance – and current pillar lead at FNB Connect.
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1. Know what you want
Do some house-hunting homework first. Know what size suits your needs. Think about accessibility to work, public transport routes, schools and shops.
2. Do your sums
Know exactly how much you can afford. It’s not just the instalment you’ll be paying – you’ll need to include insurance (homeowner, household, and life cover) and municipal costs in your budget.
Insurance: Your house could be damaged by fires, flooding, a burst geyser, burst pipes and natural disasters. Comprehensive insurance is essential because it covers damages to the property and losses. Since your home remains the security of the bank, you are required to take out adequate coverage for the duration of your home loan. This usually covers:
- The physical structure of your house, including fixtures such as swimming pools.
- Damage by fire, lightning, floods, and storms.
- Replacement value of the property.
3. Bank on a budget
A home loan for first-time buyers can be difficult to understand, so contact your bank to do an affordability assessment to find out exactly how much credit you can access for your new home.
4. Save for, and put down, a deposit
You may need to put some of your own money on the table before you can buy a house. Depending on your financial situation, some mortgage products allow you to qualify for larger loans without paying a deposit.
5. Plan for additional costs
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, VAT and transfer duty.
6. Begin the search
There are a number of factors to consider when determining the initial amount to offer on a home – the sale price of similar houses in the neighbourhood for the past year or so will give you a good estimate of current market value. The estate agent will assist you with this information.
The general condition of the house is also important. Information concerning things that need to be done in or around the building must be taken into consideration when making a price offer.
7. Know what you are buying
View as many properties as possible. Make comparisons. Make a short list. Sleep on the short list. Do not guess or assume anything. Ask the seller or estate agent as many questions as you can until you are totally satisfied.
Viewing the selected property several times will help you make a final decision. It is your responsibility to ensure that a prospective home will not require excessive future maintenance. You are allowed to question the reason for selling and ask about the number of other sales taking place in the area.
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Once you have moved in
Maseko offers the following tips:
- Change address with all relevant parties and specific authorities. Remember to sort out your utility (water and lights) connections.
- Locate your nearest emergency services: particularly the closest hospital and police station and record their numbers.
- In case of an emergency, make sure you know where to find the main shut-off valve for water, the fuse box and any other important switches.
- Always budget for other expenses such as maintenance and repair, service costs such as a security alarm, gardening services, and any other home emergencies.
- Every building has a life cycle, which means your home will require major repairs at some point, so plan for this. Set aside an emergency fund to deal with unexpected problems, ranging from major repairs to illness and job loss.
- Live within your budget. Prepare a monthly budget and stick to it.
Start your search for your first home here.
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