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If you’re reading this, you're most likely a first-time home buyer. You're also stressing and worrying about making the wrong decisions. A home loan can become a burden if you don’t do proper research. According to SA Home Loans, the number one mistake everybody makes when buying a home is not doing their homework when entering the market. Interest rates on home loans for first-time buyers are normally high, as they consider you a “high risk”. But it depends on your home loan provider.
With this guide we aim to educate you on buying your first property and securing a home loan. This includes tips and information on calculating your bond.
When entering the market, you should ask yourself a few questions to determine how much you're willing to spend.
Let’s look at them:
Answer the above questions and you'll have a good idea on how much you need to spend on a house. The next step is to look at what influences a home loan and affordability.
Now you'll need to find out if you'll qualify for your home loan. This is normally determined by a number of factors which include the following:
Home loans for first-time buyers normally have high interest rates, as the lender sees you as a higher risk than home buyers with previous bonds. Even more so if the home loan you applying for includes extra expenses like a deposit and transfer fees.
Lenders calculate your bond repayment by looking at the repayment-to-income ratio. They look at the amount of repayments versus your income. The amount calculated will give you an indication of the home loan size you’ll qualify for.
To be precise, you’ll need to supply them with:
The calculator will then supply you with the following:
To see how much you can afford, use the affordability calculator
Before applying for a home loan, there are several things that you can do to make getting your loan easier.
If you try to reduce your current financial debt substantially, you will be in good standing to get your home loan. Pro-tip: Before applying, start saving for a deposit as most lenders require one.
When choosing your loan type you need to specify if you want a variable or interest-only home loan.
Let’s look at the difference:
One of the things most buyers overlook is hidden fees or extra costs not always stipulated in your contract. It’s important that you know about them so that you won’t be caught off guard.
Let’s look at a few of them:
Securing a home loan as a first-time home buyer can be a daunting experience. If you do the necessary research you will know what to expect and be prepared, making it easier. Creditgenie is South Africa’s premier complimentary loan assist service which can assist you in finding a home loan.
To apply, click on the button below or you can contact us at: 021-835-3030.
Only R117 per month, once-off R395