It is important that people familiarise themselves with some of the hidden costs associated with home ownership.
Buying a home is one of the most important steps in your life, whether it's your first home or an upgrade. Therefore, being informed about some of the extra costs involved over and above the purchase price can make a huge difference and make your home buying experience as easy as possible.
These ongoing expenses are often overlooked when people plan to buy a home and can cause financial pressure down the line if not considered. Although these costs are not directly related to home loan repayments, they are monthly expenses that must be taken into account when a budget is drawn up.
Some of these costs include the following:
- Utility fees, which are charged by your local municipality for the use of water and electricity and are based on your consumption throughout the month.
- Rates, taxes and levies, which are dependent on your property type and are paid to the authority that services your property, such as a body corporate or municipality. These charges cover services such as sewerage facilities, road maintenance, street light maintenance and refuse collection. If you are buying a sectional title property such as a townhouse or unit in a complex or a flat, you will be charged levies, which are costs involved in running the complex or maintaining the buildings.
- When you apply for your home loan, you will find that homeowner's insurance is mandatory, as it covers your property against loss and damage. The monthly premium is dependent on the loan amount granted for your property.
It is important that potential homeowners are aware of these associated costs and factor them into their planning and budget, as this will help the process run a lot smoother.
Nedbank have developed a buyer's guide that can help potential homeowners understand the home buying journey. The guide provides consumers with a step-by-step explanation of this journey and gives them all the information they need about being a homeowner.
Visit nedbank.co.za/homeloans to read or download a copy of the buyer's guide.
