Buying your first home is a very exciting and often overwhelming experience. It’s a big deal! We know there’s a lot to think about and prepare for. So we’ve decided to create a guide to help you through it. You can use this checklist as a quick reference to come back to.
Checklist guide to buying a home
- Plan your finances and budget for additional costs
- Check your credit score
- Go house hunting and pick what’s best for you
- Make an offer to purchase
- Read through the seller’s paperwork carefully and if you don’t understand any of the terms, ask an estate agent or attorney to have a look with you and help you out.
- Apply for a home loan
- Register the bond in your name
- Transfer the property in your name
- Get the keys and move in!
Before you even think about house-hunting, you need to know what’s required first. So let’s break down the above checklist in a bit more detail…
1. Organize and plan your finances
Your credit score matters
The first thing you need to know and check is your credit score. What is a credit score? Your credit score is a 3 digit number between 0 and 999 that is determined by how you manage your debt, your finances and transactional history, and how many accounts you have. The higher the number, the better your score is. If you have a good credit score, banks are more likely to approve your home loan application.
Save for a good deposit
Another important financial tip for becoming a homeowner is saving up to put down a deposit. If you put down a good deposit on the property, you have a higher chance of getting your home loan approved.
Banks also offer home loans of 100% which means that no deposit is required. However, putting at least a 10% deposit toward the purchase is less risk for the bank and will give you a higher chance of approval.
Budget for additional costs
Being a homeowner doesn’t just mean you pay for the house. There are long-term payments that are required. Make sure you budget for everything – including bond repayments, taxes, water & electricity costs, maintenance for gardens, pools, or other work the house needs, your commute costs, security, insurance, and space.
These are just a few common examples of additional costs to owning a home. Depending on what type of property you purchase and the location, there could be other costs involved.
2. How to purchase a home
So you have all your finances in order and you’re confident you can afford it, now you’re ready for the next step. What’s next? House hunting!
When choosing a house, remember to be realistic about the deciding factors. Choose your home based on your needs and requirements. Think about the location, security factors, future, space, etc.
Make an offer to purchase
Once you’ve found your dream home it’s time to make an offer to purchase to the seller. Once the offer to purchase has been approved, it’s time for the next and most important step.
Apply for a loan
Go to various banks to apply for the loan. We suggest applying for a loan at various banks because some might deny you, and others will approve you. So it’s always helpful to have backup options.
3. The transfer and registration process
When you have the green light to go ahead with everything, meaning your offer to purchase has been accepted, your home loan has been approved, and payment is getting sorted, it’s time for the final step – the registration and transfer process.
A bond attorney will handle the responsibility of registering the house bond in your name.
A transfer attorney will handle the transfer of the property into your name.
There are fees you have to pay for these services and the cost is dependent on the property value.
4. Get the keys and move in!
Once all that is done and dusted, it’s time to get your keys handed over and get ready to move into your first owned house. Welcome home!
We hope this first-time buyer’s guide has helped you feel more prepared for purchasing your first home. Being a first-time house buyer is a big step and can easily become overwhelming.
Remember to budget for the additional costs of owning a house. You don’t want to forget about those and then end up with a shock when you realize you didn’t plan for it. Be prepared and most importantly, organize your finances and fix your credit score. A higher credit score gives you a better chance at a home loan approval.
Lastly, don’t forget about insurance! Buying a home is a long-term investment and we recommend you protect that investment by insuring the property building and home contents inside.
Get a quick vehicle or home contents insurance quote from us on: https://qualityquote.co.za/car-insurance-quote/