You’ve overcome all the hurdles on the journey to home ownership. You’ve managed to pay your deposit, instalments, and closing payments, and now you’re a proud title deed holder.
However, while you may feel you are finally free, the expenses attached to owning a home can be unmanageable if not budgeted. Are you prepared for these?
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Insurance is king
Insurance is critical to protect your asset in the case of theft or damage, as can happen so easily.
According to Mfundo Mabaso, growth head at FNB Home Finance, you’ll need three kinds of insurance to protect your home:
- Comprehensive home insurance. A comprehensive home insurance policy will have been a requirement while your house was under financing. This covers the structure of your home, and it remains an invaluable item after you have received your title deed.
Note that sectional titles are covered by the body corporate, and will not require their own policy.
- Life cover. This is required as part of some mortgage agreements, and recommended on loan conclusion, to protect your investment for your family.
- Household contents. You may consider a break-in relatively unlikely if, for example, you live in a secure estate, however, geysers can burst for example, and fires do happen.
Mabaso says, “The premiums for these covers will depend on your profile, so it’s best to shop around and get quotes.”
Municipal rates, taxes, and levies
You’ll need to pay for your water and electricity monthly, as well as rates and refuse removal. If you’re in a sectional title- or freehold estate, you may also be required to pay monthly levies for the upkeep and management of the communal property.
Think about maintenance
Owning a home requires constant investment, whether towards repairs, improving the house, or maintenance. If you live in a housing estate, you may be required to adhere to certain standards.
“Be prepared to spend something each month, or save a bit each month towards keeping your home up to standard and keeping things in working order,” says Mabaso.
Safety and security
Protecting yourself from break-ins doesn’t just save you from trauma, it also saves you the increase that would otherwise be made to your insurance premiums.
However, saving money sometimes means spending money. Installing a good security system will ensure that you and your possessions are safe, but it can be costly.
“Think about what your home will require, and be sure to budget for all expenses,” says Mabaso.