![\"Get](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/10\/money-coins-pennies-counting.jpg\")
<\/a>Get your finances in order<\/p><\/div>\n
Can I afford\u00a0to buy?<\/h3>\n\nAm I ready to buy?<\/h3>\n
Credit health<\/strong>: Check your credit health,\u00a0ensure a good credit profile and stable employment history or source of income.<\/p>\nDeposit<\/strong>: Prepare to put down a deposit of between 10% – 20% of the home’s value. (20% for any property priced at more than R2 million)<\/p>\nSecure a low rate<\/strong>: Securing the lowest interest rate possible will naturally be the best. The prime interest rate is currently 9.25%<\/p>\nGet to grips fees<\/strong>: Note\u00a0bond initiation fees, transfer costs, registration costs (which can amount to 5-8% of the value of your property), and rates and taxes.<\/p>\nPlan for rate hikes<\/strong>: Plan ahead, with contingency to survive a rise in rates of between 3-4%.<\/p>\nMaintenance<\/strong>: “Budget liberally” for maintenance costs which are sure to occur.<\/p>\nAffordability<\/strong>: Spending 30% of your monthly salary on bond payments is considered affordable.<\/p>\n<\/div>\nThe\u00a0next\u00a0step is to figure out if you’re in the best financial position to buy a house.<\/p>\n
What you will need:<\/p>\n
\n- A home loan<\/li>\n
- A big deposit (10% at least)<\/li>\n
- Money to cover initiation, transfer and registration fees<\/li>\n
- A strong financial position to pay off the bond and other monthly rates and fees<\/li>\n
- Contingency (investments, savings) for unexpected events<\/li>\n<\/ul>\n
“If a bank does not grant you a loan due to affordability criteria or based on not finding enough value in the property, instead of trying to fight it too hard, you may do well to take that as a strong signal that you risk over-committing yourself financially,” Loos said.<\/p>\n
“It is important to bear in mind that one\u2019s house is potentially a destroyer of one\u2019s finances if you over-commit” he said.<\/p>\n
A\u00a0practical example from FNB<\/h3>\n
A\u00a0R500,000 home<\/strong>, will attract R10,000<\/strong> in bond costs, which is the amount to register the bond with the Deeds Office.<\/p>\nWhile there is no transfer duty on this amount, which is the tax owed to SARS, there are still transfer costs of R12,100<\/strong>, which are the fees paid to the conveyancing agency for their services.<\/p>\nIf you secure an interest rate of prime plus one (10.25%), your monthly repayments on a R500,000 loan will be R4,900*<\/strong>.<\/p>\n*These are not your monthly costs, which would also include rates, taxes, levies and maintenance.<\/em><\/p>\n![\"A](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/05\/Suburg.png\")
<\/a>A leafy suburb<\/p><\/div>\n
Where should I buy?<\/h3>\n
According to Loos, where you want to live is a judgement call every home owner must make, based on what they want, and weighing the pros and cons.<\/p>\n
Nedbank’s Timothy Akinnusi said it’s important to not only look at “right now”, but also consider the future of the area where you’re buying.<\/p>\n
“Homes located in areas with day to day amenities such as shopping malls, good roads, schools, or hospitals will increase the future value of the home; and homes located in remote areas with no amenities in close proximity may depreciate in value,” he said.<\/p>\n
But there are certain things to look out for which the experts believe will make your decision easier:<\/p>\n
\n- Buy a house as close to work as possible – which will save you time, money and help your mental state in the long run.<\/li>\n
- Properties far away from major areas of employment tend to be more affordable, but the commute takes its toll.<\/li>\n
- Properties closer to employment nodes are most valuable, but can\u00a0also suffer from congestion.<\/li>\n
- Homes close to schools are important if you’re looking to start a family.<\/li>\n
- Homes close to public transport routes are becoming increasingly more important in South Africa and boost value.<\/li>\n
- Consider infrastructure – not only the upkeep of the roads, but also regarding broadband, fibre and other valuable services.<\/li>\n<\/ul>\n
“Do your homework on the traffic congestion close to your planned home on various days of the week – especially near to major retail nodes;\u00a0you may get tired of the weekend traffic congestion,” Loos said.<\/p>\n
![\"Buying](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/01\/rental.png\")
<\/a>Buying is not the only option<\/p><\/div>\n
Should I buy at all?<\/h3>\n
Perhaps the most pertinent question to ask is whether you should be buying a house at all.<\/p>\n
Loos suggests that some people are just better suited to renting, which is still a viable option in South Africa.<\/p>\n
“I think SA\u2019s obsession with home ownership should be dumbed down a lot. There is no need to buy a home. We have a great rental market too,” the analyst said.<\/p>\n
People who should look at renting:<\/h3>\n\n- People who are early into new careers, or are thinking of switching or taking a break from their careers<\/li>\n
- People who are not ready to settle<\/li>\n
- People who move around a lot<\/li>\n
- People who are still saving up<\/li>\n
- People who simply cannot yet afford the home they aspire to.<\/li>\n<\/ul>\n
“The big advantage of buying is that you don\u2019t live with the uncertainty of a landlord selling up and requiring you to relocate when it doesn\u2019t suit you – but both the rental and buying options have their place,” Loos said.<\/p>\n
More on property<\/h3>\n
New fibre-to-the-home suburbs announced<\/a><\/strong><\/p>\nMost expensive suburbs in Joburg<\/a><\/strong><\/p>\nWhere to find the most expensive homes in South Africa<\/a><\/strong><\/p>\n
Am I ready to buy?<\/h3>\n
Credit health<\/strong>: Check your credit health,\u00a0ensure a good credit profile and stable employment history or source of income.<\/p>\n Deposit<\/strong>: Prepare to put down a deposit of between 10% – 20% of the home’s value. (20% for any property priced at more than R2 million)<\/p>\n Secure a low rate<\/strong>: Securing the lowest interest rate possible will naturally be the best. The prime interest rate is currently 9.25%<\/p>\n Get to grips fees<\/strong>: Note\u00a0bond initiation fees, transfer costs, registration costs (which can amount to 5-8% of the value of your property), and rates and taxes.<\/p>\n Plan for rate hikes<\/strong>: Plan ahead, with contingency to survive a rise in rates of between 3-4%.<\/p>\n Maintenance<\/strong>: “Budget liberally” for maintenance costs which are sure to occur.<\/p>\n Affordability<\/strong>: Spending 30% of your monthly salary on bond payments is considered affordable.<\/p>\n<\/div>\n The\u00a0next\u00a0step is to figure out if you’re in the best financial position to buy a house.<\/p>\n What you will need:<\/p>\n “If a bank does not grant you a loan due to affordability criteria or based on not finding enough value in the property, instead of trying to fight it too hard, you may do well to take that as a strong signal that you risk over-committing yourself financially,” Loos said.<\/p>\n “It is important to bear in mind that one\u2019s house is potentially a destroyer of one\u2019s finances if you over-commit” he said.<\/p>\n A\u00a0R500,000 home<\/strong>, will attract R10,000<\/strong> in bond costs, which is the amount to register the bond with the Deeds Office.<\/p>\n While there is no transfer duty on this amount, which is the tax owed to SARS, there are still transfer costs of R12,100<\/strong>, which are the fees paid to the conveyancing agency for their services.<\/p>\n If you secure an interest rate of prime plus one (10.25%), your monthly repayments on a R500,000 loan will be R4,900*<\/strong>.<\/p>\n *These are not your monthly costs, which would also include rates, taxes, levies and maintenance.<\/em><\/p>\n A leafy suburb<\/p><\/div>\n According to Loos, where you want to live is a judgement call every home owner must make, based on what they want, and weighing the pros and cons.<\/p>\n Nedbank’s Timothy Akinnusi said it’s important to not only look at “right now”, but also consider the future of the area where you’re buying.<\/p>\n “Homes located in areas with day to day amenities such as shopping malls, good roads, schools, or hospitals will increase the future value of the home; and homes located in remote areas with no amenities in close proximity may depreciate in value,” he said.<\/p>\n But there are certain things to look out for which the experts believe will make your decision easier:<\/p>\n “Do your homework on the traffic congestion close to your planned home on various days of the week – especially near to major retail nodes;\u00a0you may get tired of the weekend traffic congestion,” Loos said.<\/p>\n Buying is not the only option<\/p><\/div>\n Perhaps the most pertinent question to ask is whether you should be buying a house at all.<\/p>\n Loos suggests that some people are just better suited to renting, which is still a viable option in South Africa.<\/p>\n “I think SA\u2019s obsession with home ownership should be dumbed down a lot. There is no need to buy a home. We have a great rental market too,” the analyst said.<\/p>\n “The big advantage of buying is that you don\u2019t live with the uncertainty of a landlord selling up and requiring you to relocate when it doesn\u2019t suit you – but both the rental and buying options have their place,” Loos said.<\/p>\n New fibre-to-the-home suburbs announced<\/a><\/strong><\/p>\n Most expensive suburbs in Joburg<\/a><\/strong><\/p>\n Where to find the most expensive homes in South Africa<\/a><\/strong><\/p>\n\n
A\u00a0practical example from FNB<\/h3>\n
<\/a>Where should I buy?<\/h3>\n
\n
<\/a>Should I buy at all?<\/h3>\n
People who should look at renting:<\/h3>\n
\n
More on property<\/h3>\n