If you’ve been renting for a while and are ready to take the next step to buying your own home, you need to do your homework and know exactly what you are getting yourself into.
Dr Simphiwe Madikizela, Head of Special Projects at FNB Housing Finance, says many first-time buyers usually get blinded by the excitement of owning their own home and overlook the importance of research, which ends up costing them more in the long term.
Apart from the home loan application and registration process, Dr Madikizela says there are a number of other important factors that one needs to consider when owning a home:
1. Future needs
Avoid basing the decision of buying your house only on your current needs, rather take a long-term view and consider if the house will still cater for your family’s needs in the future. For example, a two bedroom house may be perfect for newlyweds, but could soon be too small as the family expands.
While you may get a bargain when buying a spacious house outside of town, you need to consider factors such as your work premises, medical centres and schools for your children, etc. It may end up costing you more money and time to travel on a daily basis.
3. Freestanding or sectional title
When renting, you don’t often put as much time and money into maintaining the property, depending on the agreement with your landlord. When you own the property, you will be responsible for making sure that the property stays in good condition at all times.
On the other hand, when buying a townhouse, you will be liable for a monthly fixed cost for levies and rates and taxes - over and above the mortgage loan instalment due to the bank.
4. Buying an old house
Buying an old house for a reasonable amount in a good neighbourhood may not be such a bad idea, however, what many buyers often underestimate is the cost of fixing up the house. Furthermore, without professional inspection there may be other hidden defects that you would only discover once you move in.
5. Neighbourhood safety
While no area is immune from crime, it is essential for first-time owners to research crime statistics in the area before buying. For example, if you have a job that requires you to travel a lot, leaving the house unguarded, you could easily become a victim of crime.
“Lastly, always save for rainy days, as life is unpredictable. When moving from renting to buying, it is advisable to save at least six months of your home loan and monthly expenses even if your job is not under threat,” Dr Madikizela.
“This will create a good safety net and give you a peace of mind should anything go wrong.”
Article from property24