before you get started. You are entitled to check your
credit rating for free once a year.
2. Work out what you can afford
Analyse your income and expenses very carefully
to work out what you can afford. Bear in mind that
homeownership comes with additional expenses and
responsibilities beyond merely paying a bond. You
will need to repair and furnish your new home, and
additional expenses always crop up.
3. Consider the interest rate
Interest rates look set to remain low for the time
being, but it is always worth calculating what the
difference in your bond repayments would be should
the rate fluctuate. There should always be room in
your budget for upward growth – especially if you
buy when the interest rates are low.
4. Save up for a deposit
Banks are far more likely to grant a home loan
if you have a deposit saved up. It’s good to aim at
saving between 10% and 20% of the purchase price,
although obviously the more you can offer, the better
your chances of approval of your home loan, and at a
favourable rate.
5. Get your documents in order
Making an offer on a home and applying for a bond
involves paperwork. This can be daunting, but the
consultant who handles your application will guide
you through it. To start your home loan application
process, you will need at least the following
documents:
– Your latest payslips and bank statements
– An Income and Expenditure statement (your
consultant can help you with this)
– A Statement of Assets and Liabilities (and this)
– If you are not a SA citizen, copy of residence and
work permits, otherwise
– Your SA identity document
www.reimag.co.za
6. Shop around for the best deal on your bond
When you are ready to make an offer on a property,
it makes sense to apply for a bond from more than
one bank. This allows you to be sure that you have
the best opportunity for an approval, and at a
favourable interest rate.
7. Should you buy with a friend?
While property pricing and market conditions
currently favour buyers, many are still struggling
to m e e t t h e l e n d i n g c r it e r i a of f i n a n c i a l
institutions. In light of this, many buyers are
choosing to pa r tner w ith a friend or fami ly
member to purchase property together. In today’s
property market, co-ownership has become an
especially attractive option as the shared costs
make it a much more affordable venture. Although
some banks no longer offer joint cheque or savings
accounts; Adrian Goslett of RE/MA X says that
due to the vast number of buyers who are choosing
to co-own w ith another part y, many lenders
do offer joint home loan accounts or mortgage
packages that cater specifically for this situation.
“ There are def initely advantages of buy ing
proper t y w ith a par tner, such as the greater
prospect of f inance being approved as well as
the possibility of obtaining a bond for a higher
amount. Additionally, there is the benef it of a
reduced individual f inancial commitment as all
costs during and after the purchase process are
shared. Both parties can contribute to the deposit,
transaction costs, bond repayments, as well as
the maintenance and utilities bills,” says Goslett,
“However, it is important that co-ownership
is handled in the correct manner and that all
aspects are discussed before any transaction has
been concluded. It is advisable that there is an
agreement in writing that is signed by both parties,
should any dispute arise in the future.”
RESOURCES
IHFS
RE/MAX OOBA
Residential Handbook 2013
11