You’ve found your dream home … but before you rush to the bank to apply for a home loan, there are some things to think about. First and foremost, you do realise that buying a house is a financial commitment that requires a stable income for years to come, don’t you? Mortgages can vary between 5 to 30 years according to your loan agreement. Whilst it is difficult to prepare for every eventuality, you should ask yourself, Will I be able to make a monthly repayment if I lose my job? However negative this question might seem, it will make you realise the importance of setting affordable monthly payments.
Do You Qualify For A Loan?
If you are a first time home buyer, in order to qualify for a loan you will need a clean credit record, a stable employment history, and a minimum income per month. Also, your monthly payments cannot exceed 30% of your gross income.
Bond Origination
Although it is possible to successfully negotiate a home loan by yourself, there is no need to. Why not get help from an online estate agency like Home Fair? They have in-house bond originators and attorneys to ensure that the sales process is efficient and timely. These experts will find the best home loan for you and save you a whole lot of hassle.
It is also a good idea to apply for a pre-qualification certificate that guaranties the bond amount you qualify for. This will also give you the confidence to look for properties within a certain price range.
Additional Costs
Knowing how much you can afford to spend will clearly define your buying options. Keep in mind that in the process of buying a house there are many costs that may not be so obvious, like registration fees, transfer fees, bond registration costs, bank initiation fees and other costs that you have to take into account. A deposit is also required by most banks. It’s a good idea to put down a large initial deposit which guarantees lower interest rates on your home loan.
A Little Extra Goes A Long Way
Stick to a (realistic) budget when house hunting. Remember that the longer the mortgage, the lower the monthly repayment is going to be, but if you pay a little extra each month, every Rand will go towards reducing the interest on the home loan. Paying a little extra each month will make a huge difference in the long run.