FINANCE
10 Things
Every Homebuyer Should Know
Set yourself up for success
B
MEYER DE WAAL
Owner of My Bond Fitness and a conveyancing lawyer for over 28 years
uying your own home can be a daunting prospect. Many of us have spent our lives renting, so when we decide to take the step up to owning property we often aren’ t quite as prepared as we should be. Here we break down exactly what a first time home buyer should know before signing on the dotted line.
1. Become an Expert
The first thing many of us do before we buy a new mobile phone, TV or even a pair of running shoes is we research. We look up the product online, compare specs and read countless reviews before finally making our decision. You would think most of us would do that on the biggest purchase of our lives – a house. The thing is, we don’ t.
Not only should you research the housing market extensively, comparing properties in your desired locations, but also get a Comparative Market Analysis( CMA) to compare the price you are being asked to pay with other prices in that neighbourhood. More often than not the estate agent involved will offer you a 1-piece brochure with information on the property – don’ t be afraid to request more! Buying a house is a 20-year commitment and one that should not be entered into lightly!
Use websites like Lightstone and PropStats to get a CMA on the property you might be interested in. Remember – the CMA is a guideline and not an accurate representation of the property market.
2. Check You Credit Score
The major stumbling block in most property sales is financing, with only 1 in 4 home loans being approved. What many of us don’ t realise is the importance our Credit Score plays in this decision. Your credit score will determine the rating the bank and other financial institutions give you after examining how you have handled credit in the past. If you have a“ thin” profile and little or no debt, it generally means you have little information the bank can analyse and you may find it strange that the bank may request that you first open a store account to establish a credit profile and then come back to them
If you’ re in the market for a new home, check out how much you could qualify for at My Bond Fitness. By knowing your credit score, you have the chance to improve it over time. This could potentially save you up to 30 % on your bond payments.
3. Size Matters
After you have found out your credit score, you can check your affordability. This takes into account your income and expenses, working out the size of the loan you could potentially get from the bank. Knowing how much you could possibly borrow makes the entire process far simpler. Most agents will show a client several houses before they decide on the one they really like. After the potential owner has decided, the agent
26 AUGUST / SEPTEMBER 2018 SA Real Estate Investor Magazine