Deciding to buy a house can be exciting. But, this may be one of the biggest financial decisions you’ll ever make. Many people have lost large amounts of money, chose the wrong house or even had it repossessed because they didn’t do thorough research. Albertus van Staden, head of credit at FNB Housing Finance, shares 4 important things to consider before buying a home:
1. Affordability
Simply taking your income into account is not an accurate indication of your affordability. There are expenses that will have to be maintained, along with your bond repayment.
Before you buy a home, apply for a credit check to get a clear indication of the loan you qualify for.
Don’t be disappointed if the amount you qualify for is less than what you expected. This is to ensure that you are able to repay your loan.
2. Expenses
Consider all your expenses because your bond won’t be the only thing you pay. Other expenses include furniture, municipality rates, taxes, insurances and levies, which are costly.
3. The type of property
When buying a house, know about the different types of properties, and how they will affect your finances once you’re an owner.
Buying a sectional home – a unit in a complex or a development – is a more affordable option. This is because you pay your levies – a fee that goes towards the general maintenance of the complex. In addition, these come with rules, so find out about them before you buy this type of property.
The disadvantage of a sectional home is that if you want to renovate, there are restrictions as to what you can do, because you have to abide by the rules of the governing body.
However, this is different if you buy a free-standing property or a cluster house, as you have to maintain the property yourself.
This is not always the case for a free-hold property; bear in mind that some residential estates also have limitations on what can be done.
4. Renting is not always a bad option
While renting, put away enough money for a deposit so that when a good deal comes along, you’re in a better position to secure the bond and the house you want, in an area that you like and have researched. It is important to look at all your options.
