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