Freehold or Sectional Title?
This will be determined by your budget as free-standing houses are more expensive than body corporate living. Sectional title life has its advantages and restrictions when it comes to added security and restrictions on freedom of movement, for example making noise at 03:00 or parking on a pavement. When deciding to move into a complex, ask the estate or managing agent for a copy of the latest audited financial statements as well as a copy of the house rules. Also, make sure that the house rules are registered with the deeds office; if not, the body corporate must adhere to the Sectional Titles Act. Once you have found a space you find fitting to your requirement and pocket, arrange a signed offer to purchase (you’ll need this a bit later). Note that there are charges such as levies and maintenance costs, rates and taxes, electricity and water, sewer and refuse that need to be kept in mind when purchasing a homestead.
One of the most important things before even thinking of approaching the bank is to make sure that you have a good credit record. Double check those clothing and credit card payments – a brilliant credit score will increase the success rate of your bond application.
How Much Can You Afford?
According to law, there is a maximum repayment rate, which banks and other financial service providers are not allowed to go above. Work yours out with the following simple equation: Total Gross Joint Income X 30/100 = Max Repayment. Is this an amount you will be able to part with every month?
This is the scary part but don’t worry too much – the consultant assisting you has been trained to give you the best deal possible. But before you jump in line at the bank, be sure that you have the necessary documentation in order to successfully apply for a bond. You will need the following: a signed offer to purchase, certified copy of your ID, three months’ proof of income and a filled-in home loan application, which the consultant will be able to provide.
There will be a fee payable once your bond application has been approved. This fee is made up of the conveyancer’s fee (the fee paid to an attorney for overseeing the repayment process) and the Deeds Office registry fee (this is to register the property and the bond in your name).
Property Transfer Costs
Transfer duty is a tax payable to SARS for the transfer of the property from the previous owner’s name to yours.
If you know of someone thinking of buying their first place, show this to them. Also, check out our Top 20 Tips to Decorating Your Home on a Budget.
By Shawn Greyling