Buying a home in South Africa: Here's why experts say don't delay
If homeownership is one of your long-term goals, waiting too long to enter the property market could end up costing you more. According to Samuel Seeff, chairman of the Seeff Property Group, buying a home as. . .
If homeownership is one of your long-term goals, waiting too long to enter the property market could end up costing you more. According to Samuel Seeff, chairman of the Seeff Property Group, buying a home as soon as you are financially able is one of the smartest financial decisions you can make. “Property prices generally increase over time, meaning the longer you delay your purchase, the more expensive that same home is likely to become,” he said. A home is more than just a place to liveUnlike renting, where monthly payments benefit a landlord, owning a home allows you to build wealth over time. Each bond repayment increases your equity – the portion of the property you own outright – while any increase in the home’s market value further boosts your wealth. That equity can later be used as a deposit on a larger property, help finance major life expenses or provide a financial safety net in emergencies. However, Seeff cautions against accessing home equity for non-essential lifestyle spending. Make sure you’re financially readyWhile buying early has clear advantages, prospective homeowners should first ensure they are financially stable. A home is a long-term commitment, and selling a property can take time if financial circumstances change. Seeff recommends that first-time buyers have a healthy credit score, ideally650 or above, and a stable income before applying for a home loan. As a guideline:AnR800 000home generally requires a gross monthly income of aboutR27 000. AR1. 2 millionproperty typically requires an income of aroundR40 000per month. Banks also assess employment history, existing debt and monthly expenses before approving a mortgage. Permanent employment with at least three months’ service is generally preferred, while self-employed applicants often face stricter lending criteria. Budget beyond the purchase priceBuying a home involves more than just qualifying for a bond. Prospective buyers should also budget for:Bond registration costsProperty transfer costsTransfer duty on the portion of a purchase price exceedingR1. 21 millionMunicipal rates and taxesSectional title levies, where applicableHome insuranceOngoing maintenanceAlthough many banks offer100% home loansto qualifying first-time buyers, deposits may still be required on higher-value properties. Avoid new debt during the transfer processOnce an offer to purchase has been accepted, the legal transfer process typically takes aroundthree monthsto complete. During this period, buyers should avoid taking on additional debt or opening new retail accounts. Banks often conduct a final affordability and credit assessment before registration and may withdraw an approved home loan if a buyer’s financial position has deteriorated. A long-term investmentWhile buying a home requires careful planning, Seeff believes it remains one of the best ways to build long-term financial security. For first-time buyers who are financially prepared, entering the property market sooner rather than later could mean paying less for a home today while benefiting from years of future capital growth. Do you own or rent you current home?Let us knowby completely the short survey below …