Buying a house will probably be the largest investment you will ever make. The most important thing to remember when embarking on this process is that research is king. Therefore, read, read, and read some more before you get carried away by all the property for sale.
Many people find it daunting to move from renting to owning a home. The responsibility of paying a mortgage, rates and taxes and maintaining a property may seem overwhelming. However, in most cases it is best to buy rather than rent when you can afford it. Read on for more detailed information regarding how to buy a house :
Know what you can afford
Before you start shopping around, you should know what you are able to afford. Many banks offer mortgage calculators, giving you an indication of what size loan you will qualify for. Credit lending is still restricted, which means the larger your deposit (aim for around 20%), the better your chances of getting a mortgage. A better credit record will improve your chances of getting a loan, and can result in a lower interest rate.
Do your homework
Do not look at only one property for sale, and if you are not absolutely sure about a specific house, don’t buy it. There is no need to rush into buying – look at as many houses as possible to get an idea of what is available and what properties cost. Investigate all possible neighbourhoods you might want to live in. Buying a fixer-upper in the right neighbourhood can be a great investment, while you might find some bargains in up-and-coming neighbourhoods. Keep on searching until you find something that you really love – that will make it easier when dealing with the stress of mortgage repayments! Before you buy anything, get an informed opinion on the condition (and price) of the property. Know what you can afford (remember other house expenses, such as maintenance, rates and taxes, when you make your calculation). Once you make an offer on a house, the bank will have the house appraised to make sure it is worth what you are paying for it.
Get good advice
Ask friends, family members or colleagues who recently bought property to recommend lawyers, mortgage brokers, bank assistants, property websites and other agents. A professional, well-informed mortgage broker or bank assistant who has your best interests at heart, can be invaluable as they will go out of their way to get the best possible deal for you on your mortgage. Paying a lower interest rate can save you thousands of rands over the term of the loan. Before buying a house, it is advisable to also have your own inspector evaluating the property for any structural or other problems. A local assessor can also advise on a fair price for the property.
READ MORE: Tips for young buyers on saving for a deposit
Make a decision
The fear of commitment makes many buyers very indecisive, causing them to miss good opportunities. Be ready to make the commitment when you start house hunting.
Make an offer
Once you find a property to buy, the first step is to make an offer, which can be accepted or rejected. Once the offer has been accepted, you will enter into an agreement with the seller, and pay a small deposit. The property will also be inspected, which may highlight additional issues and can lead to amendments in the agreement. The closing of the sale and transfer of property can typically take anything from 30 to 90 days.
In Summary: How to buy a house?
- Establish your budget
- Search for homes in areas within that budget
- Seek professional real estate and financial assistance
- Commit quickly upon finding a suitable property
- Submit your offer to purchase and pay your negotiated deposit
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