Step 2: Affordability & Personal Finance
How do you Buy a Home on a Single Income?
Your earnings are the ultimate decider of whether or not to invest in or buy property. Equally so, a person’ s earnings sometimes become one of the biggest hindrances from purchasing a property, especially a first-time home buyer.
According to CEO of Greeff Christie’ s International Real Estate, Mike Greeff two incomes are always better than one, as far as a bank is concerned. However, that is not always the case. There are so many families that either have one income, or singles who want to purchase a house on their own.
Purchasing a home on a single income is definitely possible, but there are a few extra things you need to think about before taking the leap.
1
Buyers
2
Even
3
Deposits
Get a bond originator
work through bond originators, like BetterBond, who will know which home loan options are available to them. Bond originators can also advise buyers on the various prerequisites involved when applying for a home loan and can collect a set of quotes on their behalf to ensure that they get the lowest possible interest rate on their home loan.
Reduce your credit card limit
if your credit card has never been used, the credit limit will go against your application for a loan. You may be keeping a R30,000 limit on your credit card‘ just in case’, but the bank will assess you as though you are R30,000 in debt. Consider reducing your credit card limit to just R10,000 in order to make yourself more appealing to lenders.
The bigger the better
, that is. Regardless of whether you are a one income family or more, the bigger the deposit, the easier it is to get credit. A 20 % deposit is the ultimate aim, because it also means that you pay less on bond repayments. It isn’ t always achievable for everyone within the time frame they have set themselves but the closer you are to that golden 20 % the better.
4
Lenders
Only borrow what you can comfortably pay back
will tell you the maximum amount you can borrow, but that doesn’ t mean you actually need to borrow that much. Give yourself a little wiggle room, and do the figures yourself. That means that you need to look at your budget, and how much you can comfortably pay off without forgoing your other necessary expenses.
10 FIRST-TIME INVESTOR