Tips for buying your first home

It’s something most of us aspire to achieve….owning a home; having a place we can call our own, but buying a home for the first time can be very daunting. We’ve put together a few financial tips for the first time home buyer:

  1. Save for a deposit

    Unless you’ve won the lotto and can purchase your home cash, most would need to shop around for home loans for first time buyers in order to finance the purchase. In the past, it was easy to get offered 100% financing. Nowadays, you will most likely need a deposit, usually between 10 – 20% of the purchase price.

  2. Repayments

    Determine the amount which you could afford as a monthly repayment, taking into account your regular income and expenses. There are various repayment period options available. Most people opt for 20 years, but this can be extended to 30 years.

  3. Price range

    Most financial institutions have online home loan calculators which will assist you in determining the amount of finance for which you qualify.

  4. Interest

    Remember that this is negotiable. The better your credit record and the higher your deposit, the better the interest rate you will be able to negotiate.

  5. Once-off costs

    There will be transfer costs to register the property onto your name at the Deeds office. Transfer duties (payable to government) and transfer fees (payable to transferring attorney). Then bond registration costs to register the bond over your property in favour of the financial institution (payable to the bond and conveyancing attorneys).

  6. Additional monthly costs

    Homeowners’ insurance – compulsory short term insurance which protects your home against the risk of structural damage.
    Life cover - not compulsory, but usually highly recommended.
    Rates and taxes – Ask friends in areas in which you are looking to buy to get an idea of rates and taxes payable.
    Levies for maintenance and security of Sectional Title homes.