GETTING STARTED
Food for thought
As a first time home buyer, buy smart
M
ost dream of owning their own home, but
with so much economic uncertainty and
the stringent mortgage credit criteria,
it may seem daunting, This need not be the case,
provided that you do your homework and buy smart.
Start small and grow with your needs, but buy sooner
rather than later.
The upside of the economic down-turn is that the
historic f lat interest rate and house prices look set
to hold into 2014 making home ownership more
affordable in over three decades. According to
mortgage originator, ooba, there is a willingness to
buy amongst first timers and it reports a year-on-year
growth with more than half of its applications falling
into this category.
The decision as to when, what and where to buy
depends on your circumstances and needs. Provided
you pay fair market value, any time is the right time to
buy, but now is undoubtedly a better time than most.
8
Residential Handbook 2014
Before shopping for your new home, find out what
you can actually afford; how much mortgage finance
you qualify for and how much cash funds you will
need for the costs associated with buying a property.
Aside from a good credit record, the general rule
is that your bond repayments should not exceed
25% to 30% of your gross monthly earnings.
Transactions costs can add up to 20% of the value
of the property. Be sure to also budget for moving
and electricity and other deposit costs and allow for
potential short-term utility cost hikes and other
expenses in your monthly budget.
While home buying is more about security than
investment returns, it is nonetheless important
that buyers ensure that they pay fair market value.
Research the market values in the street and
suburb and whether there is room for improvement
of the property.
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