It should come as no surprise that buying a home is a lengthy process because it is one of the most substantial expenditures you will ever make. While it may appear intimidating at first, you won’t be venturing into unknown ground. The path is well-marked, and skilled consultants are available to assist you along the journey.
If you’re not sure where to start, here’s a useful step-by-step guide to buy apartment tulum a home in South Africa, so you may approach one of the most significant decisions you’ll ever make with confidence:
Step 1: Figure out how much you can spend.
Before you begin looking for a home, you should have a good understanding of the financing options accessible to you. “In these days of stricter lending regulations from financial institutions, rough estimations of what you think you can afford just aren’t good enough,” says Rhys Dyer, CEO of ooba home loans, South Africa’s top house loan comparison service.
Use a bond affordability tool like ooba’s Bond Indicator, which is a free, online tool, as a starting point. This will provide you your credit score, an overview of your affordability, and a reasonable estimate of your price ceiling.
This will be a great resource during your property search, and the Bond Indicator will also provide you with an ooba Bond Indicator Certificate that you may use when applying for a mortgage (more on that later). Another option for gaining prequalification is to have your credentials confirmed by a professional.
Step 2: Evaluate your credit history
In the eyes of your bank, your credit score is a large number above your head that indicates how risky you are. Your credit score tells your bank whether or not you’re a good risk based on your debt payback history. The credit bureau will issue your bank with a three-digit number ranging from 0 to 999 based on various calculations based on your transactional history. Naturally, the higher the credit score, the better, and one of the most precious personal finance assets you may have is a high credit score rating.
In addition to determining your affordability, the aforementioned Bond Indicator can also provide an estimate of your credit score. Before you start the home-buying process, you should gather these information.
Meanwhile, make sure you pay your payments on time and don’t borrow more than you can afford; these are two of the most efficient ways to keep your credit clean.
Step 3: Locate a real estate professional.
While it is usually considered that estate agents primarily work for selling, they are also a valuable resource for home purchasers. “It’s true that anyone can seek for a home and even get a peek inside without the help of an estate agent,” says Rhys Dyer. “However, unless you have the time to make house hunting a full-time job, an agent will be able to match you with your dream property much faster.”
Find an estate agent with whom you can form a solid working connection (consider asking friends and relatives for recommendations). Their understanding of the home market, as well as their ability to manage paperwork and negotiate with sellers on your behalf, will make the transaction go much more smoothly. Furthermore, because the seller pays their commission, their services are free.
Step 4: Locate the home of your dreams.
Now comes the portion of the home-buying process that most individuals like the most: the house hunt. This is, of course, the most difficult aspect of the procedure, because it will all be for naught if you don’t discover a property that suits your needs.
Of course, before going on a property hunt, the first step is to have a clear notion of what those prerequisites are. Consider the following:
- Wherever you choose to call home.
- Whether proximity to a school, medical institution, supermarket and stores, and other beneficial amenities is necessary.
- The intended home size and whether or not a garden is required.
- Whether or not you want to be a part of a gated community.
- Is it necessary to live in a peaceful neighborhood?
You may start looking for a home once you have a clear notion of what you want. Scheduling house viewings for weekdays (to avoid the weekend rush), taking your own photos (rather than relying on the agent’s photos, which are intended for marketing purposes), and coordinating your viewings so that they take place within a short window of time (otherwise, houses you view may be sold before you make your final decision) are all helpful house hunting tips.
Step 5: Make a buying offer.
You’re ready to sign an offer to purchase once you’ve discovered your dream house and gotten your finances in order. This is a contract between you and the seller that spells out the terms and conditions of the property sale.
Keep in mind that “far from being merely an agreement, an offer to purchase is a binding contract; once you make an offer, you cannot easily change it,” as Rhys Dyer notes. Before signing an agreement, it’s critical to have a thorough grasp of what it contains. Keep in mind that the seller is required by law to report any known building issues.
Step 6 – Make an appointment for a home inspection.
A house inspection should be a condition of the purchasing agreement. This is your chance to find any hidden flaws in the property, and it’s critical that you understand your rights in this situation. For three years after the problems are detected, sellers are accountable for all latent defects in their property.
The seller will also get a copy of the report, and it’s up to you whether or not you want the seller to make any repairs.
Step 7: Submit an application for a mortgage.
After you and the seller have reached an agreement, the following step is to get a home loan to cover the cost of your acquisition. A home is a substantial investment, which is why banks have put in place a system to assist people in purchasing them within their financial means without having to file for bankruptcy.
How do you get the greatest home loan interest rates?
You can apply for a home loan directly with your bank or use a home loan comparison site such as ooba home loans. Because the home loan comparison service (or bond originator, as they’re frequently called) will send your application to various banks in order to secure you the best price, the latter is very important. Bond originators, like estate agents, are free to the buyer. The bank pays them a commission.
The lower the bank considers you to be a risk, the better your interest rate. Your credit history and the size of your deposit are also factors that influence this. “While a deposit is not always necessary, aim to put down 20% or more if you can, since the bank will be more likely to offer you a better rate because the risk of the loan is lowered,” Rhys Dyer advises.
Is it possible to acquire a home loan without putting down a deposit?
A zero-deposit home loan is conceivable, and according to Rhys Dyer, “more than half of all the applications submitted by ooba home loans are from buyers who have no access to a deposit,” with three out of four of these applications being approved.
What happens if your house loan application is turned down?
Don’t give up if you don’t have your bond approved right away. Even if your first application was turned down by a bank, you can still acquire a home loan because ooba home loans has been successful in securing home loan funding for nearly two out of every three applications that are initially turned down by a bank.
Step 8: Seal the deal
So you’ve made an offer on a house and secured a mortgage…
What’s next after your bond has been approved? The process is delegated to attorneys, who will manage the property transfer from the seller to you as well as the registration of the bond over your property.
The attorney will prepare documents for the buyer to sign and send them to the Deeds Office, which will analyze and approve the documents within 8 to 10 business days. Keep in mind that you will have to pay the South African Revenue Services a transfer duty (SARS).
Overall, Rhys Dyer predicts that it will take 69 working days for your bond to get from “granted” to “registered,” with solicitors on hand to help you along the journey. In the meantime, start saving for your first bond repayment as well as any house modifications you want to do.