Buying a home is most likely the biggest investment you will ever make, yet most people do more research about the features and specifications of the new mobile phone or car they want to buy, than buying a home. Yet, faced with a mortgage loan that may take 20 years to pay off, they also do little to prepare themselves for a home loan application and know how to negotiate the best interest rates possible.
My Ten Top Tips for Home Buyers are as follows:
- Become and expert yourself before you buy
- Spend time to go through all the property listings and compare prices and what are to offer. Get a CMA – comparative market analysis to compare the price you are to pay with other prices in the neighbourhood go to www.lightstone.co.za for such report.
- Check out your credit profile and repair or improve it before you apply for a home loan
- Do you have a “thick” or a “thin” credit profile ? – it means a profile with little or sufficient credit behaviour information – used to “score” your home loan application.
- A low credit score may increase the home loan interest rate and cost you up to 30 % more in home loan repayments
- What is your affordability to raise a home loan?
- Check out your credit profile and home loan affordability before your buy – for a free online home loan pre-qualification – go to www.mybondfitness.co.za
- Work out your personal budget in advance – replace your rental with the new home loan repayment and ‘check” if you can still balance your budget. Make use free budget tracking tools such as www.mobile2budget.com
- How are you employed?
- Self-employed or commission based home buyers have more “red tape” to overcome for a home loan approval – contact a home loans consultant first to get the home loan requirements – before you buy.
- Did you consider a Government Subsidy as first time home buyer?
- Go to www.flisp.co.za and look at the terms and conditions
- Do you have a specialist or expert on your side?
- Line up the best property attorney, also called a conveyancer, to scrutinize your Offer to Purchase before you sign
- Do not buy the house “voetstoots” ( as is) without having a home inspection consultant checking out the house before you finally accept the condition of the property www.inspectahome.co.za
- Shop around
- Strange as it may seem – the bank that you have been supporting all your life – may not offer you the best home loan available
- Plan ahead
- How soon must the home loan be approved?– give yourself enough time.
- Is your deposit – if required – available on call and will it be invested on an interest bearing account for your benefit?
- What is your date of occupation? – agree on a fixed date in advance – it is difficult to plan move if there is no fixed date
- Do you have enough money to pay for (legal) the transfer, bond registration costs, bank raising fee, removal of your furniture?
- Do your calculations with easy to use online calculators www.avidfirefly.com
- What are the financial affairs and rules and regulations of the body corporate – if you are to buy into a sectional title complex?
- Be creative
Meyer de Waal is a property lawyer, (conveyancer) and public notary and practice in Cape Town and director of the law firms Oosthuizen and Co Meyer de Waal Inc and a member of the Wills Estates and Trust committee of the Western Cape Law Society. He regularly lectures on property structures, estate planning, affordable housing projects, access to government subsidies for first time home buyers, home loan education (appointed by a leading bank for their “borrowers education” product), and assist home buyers with innovative solutions to buy their own homes and most recent developed an unique online process to assist home buyers to pre-qualify themselves for a home loan.
021 – 461 0065 firstname.lastname@example.org