The First-Time Homebuyer Story: Banks and Bonds

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Much like more than 50% of home buyers, I recently embarked on my first timid steps into the world of property. It’s a pretty weird, wonderful and extremely daunting place to be.

After spending over 10 months scouring the Internet, newspapers and Sunday streets attempting to find my dream home I managed to find something that ticked most of my boxes.

With inventory in the Cape Town property market moving quicker than a skollie with your TV on his shoulder, finding something that actually suited most of my needs was a bit of a shock.

From viewing to agreeing to a deal in principle with the seller, everything took less than 48 hours – I’ve taken longer to decide what I want to eat from a Steers menu than that! Fast food has NOTHING on the Cape Town property market.

The fact that I’d spent almost a year looking for a home meant I had had time to encounter all manner of things along the way. My thrice daily obsession of checking property24.com, to a Gumtree affinity that bordered on marriage, I had seen just about everything within my price range. My price range was, in the end, one of the determining factors for what I bought – as it is for just about every first-time homebuyer.

Now, not many folk have several million rand lying around to buy a property. My surname isn’t Rupert and I’m not married to an Oppenheimer, which left me with the task of figuring out what I could afford. By that I mean what the bank said I could afford.

Finding out about things like credit ratings, expense lists and the blacklist – all manner of lists really – became part of everyday life. I knew very little of my credit rating before this whole ordeal and it was a steep learning curve.

Here are a few things I picked up on the way:

Work on Your Credit Score

Your credit score or rating is like a financial snapshot of your life. It demonstrates to the bank, and other creditors, that you are able to control your finances in a positive and timely fashion. The thing is you could have zero debt your entire life and have an awful credit score. The best way to ensure you grow your credit rating in a positive fashion is actually to incur a little debt and pay it off on time and in full. This creates a history for the bank to look back on when it considers giving you a home loan.

Bonded for Life

Getting a home loan or bond is a seriously scary thing. How often do you find yourself in debt to the tune of millions of rands in one single go? It’s a huge decision and one that shouldn’t be taken lightly. Go over your expenses in detail and work out how much you can afford each month. The bank will want to see a detailed list and see proof that you won’t be missing any payments because you’re short of cash.

Be Prepared To Compromise

Unfortunately nothing you will see on the property market will be 100% perfect. There will always be little concessions you might need to make in order to find a home you can be happy with in the long run. Decide on factors that are ultimately ones you cannot compromise on – off-street parking, location or maybe a garden. Once you know what you absolutely need you can start to look at properties with a more critical eye. This might mean buying a home that requires a little work, or even passing on one that is the perfect location but just doesn’t tick enough boxes to make it worthwhile.

Buying your first home is a big deal so don’t be afraid to ask for help if you don’t understand various aspects. My parents are probably sick to death of me picking their brains about everything property related. My questions haven’t been limited to family either – estate agents and even the seller who finally agreed to sell me my first home got an earful. This is one of the biggest decisions you will ever make so ensure you know everything you can about it before signing that home loan.

Looking To Buy Your First Home? Find Out What Home Loan You Qualify For Here

H/T: My Bond Fitness

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