Buying a home is probably one of the biggest investments you will ever make. However, don't let buying your dream home become a nightmare - there are various aspects that should be considered carefully before you buy a house.
Marius Marais, CEO of FNB Housing Finance, advises that all prospective home buyers should firstly ensure that they view the property thoroughly. "It is really astonishing to see how many people buy a home without ever viewing it -don't just rely on the estate agent's confidence in the property, insist on an inside-out view."
Should you find something wrong with the property after buying it, you cannot hold the previous owner liable for keeping you in the dark- it is now your problem to solve. Furthermore, also ensure that the neighbourhood of the respective property is safe and that schools and shops are easily accessible.
Prospective buyers should compare all bank's home loan offerings, says Marais. "Don't leave it up to the Mortgage Originator or Estate Agent to decide on the most suitable offer. It is vital that you identify the best product to address your needs. If you are not sure about an offering, contact the financial institution who is offering the product and ask them to explain this to you."
One should be particularly cautious when buying a unit in a complex. Familiarize yourself with the complex's rules and regulations and determine whether the body corporate is in a good financial position. "Should the body corporate owe money, every owner will be liable to pay extra to settle this debt," says Marais.
Most importantly, home owners should be aware of all the costs associated with owning a property. Besides paying your monthly installment on your bond, also consider insurance, water and electricity costs as well as any levies.
"Affordability, according to the bank, means that after a person has paid all expenses, including the prospective bond installment, the customer must still have a specified amount of money left", explains Marais. Besides evaluating the customer's credit record, the number of accounts the customer has and how well these accounts are being managed are evaluated. To make provision for interest rate fluctuations, all installments are calculated at 1 or 2 % higher than the current interest rate of application, says Marais.
To assist consumers to fully understand the implications of the long-term commitment of buying a home, FNB introduced a tailored education programme* for first time buyers. "This programme does not only focus on providing customers with the knowledge on how to borrow responsibly and to avoid financial distress, but it also serves as a guideline on how to maintain a property to establish a sustainable increase in value," says Marais.
The programme furthermore includes an analysis of the respective property you have bought and a breakdown of the costs associated with the sale. "It also addresses simple issues such as the importance of having a will, as it will be up to the laws of intestacy to determine what happens to the deceased's estate should a will be absent," explains Marais.
By addressing possible issues associated with buying a new property proactively you will save yourself endless trouble and be able to make your house a home!