7 Common MISTAKES buyers make when buying a new home🏡
Category Buying a home 101
1. Not establishing your REAL buying power
Don’t run the numbers in your head. Rough calculations can lead to expensive mistakes - Know your numbers and be crystal clear on precisely what you can afford
If you need help in establishing the value of the home loan you will qualify for, don’t hesitate to contact one of our sales professionals who will gladly assist you.
2. Not understanding the total costs related to the purchase
Buying a home involves more than just the purchase price of the home - understanding all the costs upfront will help you plan for a successful move
Costs to be considered
Transfer fees and Bond Costs - calculated on your purchase price and bond amount
Bond repayment - understand what your monthly installment will be on the amount you intend to borrow.
Homeowners insurance - The bank will insist that you take out Homeowner's Insurance over the property to cover you against natural disasters like fire or storm damage.
Home loan protection assurance - it may be a condition of your loan that you have life cover equal to the value of your home loan
Municipality rates and taxes
Water and electricity consumption costs
Home Owners’ Association/Body Corporate levies
3. Not checking your credit score
Your credit score is like your report card that the banks check before offering you a loan. This number shows the banks how well you have managed your finances and if you are a good credit risk.
Any score > 700 is more attractive to lenders 👌🏻💰 more credit score info
4. Making large purchase on credit during the loan finance application process
Your debt-to-income ratio is one of the first things that lenders look at when they want to establish whether you can afford the loan that you are applying for. It is important that you DO NOT increase your debt while you are being considered for a loan or after your home loan has been granted, as this could make the difference of being approved or denied loan finance.
5. Engaging with Agents who don't conduct a thorough Property Inspection Report
Give yourself peace of mind by knowing exactly what you are buying - this means getting a thorough property condition report done. Although a property condition report has not been legislated yet, any professional agent should provide you with a detailed report so that you are fully aware of the condition of the property you are purchasing and that the price reflects the condition of the property. YOU DESERVE THE TRUTH!
6. Not researching the property or area sufficiently
Know what you are buying. Properties are not valued according to Seller’s needs but according to market conditions. Your real estate agent should be able to give you a price per square meter calculation so that the property that you are interested in can be directly compared to alternative properties - apples with apples
7. Not understanding the ongoing costs of maintaining the property
Maintaining a property is one of the most important ways of increasing the value of your property. These costs range from small expenses like mowing the lawn, changing light bulbs when needed, fixing leaking plumbing and electric wiring - to the larger expenses like re-painting your home every three years.
Author: Melanie Pearse