select
|

Don’t let unnecessary expenses sink your first home

First time home owners put themselves at risk of losing their new home by not budgeting carefully for additional costs.

New owners are often taken by surprise at the additional costs that come with a home and need to carefully consider their budget before becoming over indebted with unnecessary expenses such as new furniture.

“Although it is very exciting to take ownership of your first house you need to take particular care to budget as a new home comes with lots of new expenses,” says Dr Simphiwe Madikizela, head of projects at FNB Housing Finance, FNB’s affordable housing division.

“In FNB Housing Finance 96 percent of all purchases are by first time buyers, who are not always aware of the additional cost pressures that come with home ownership,” says Madikizela. “One of the most common mistakes we find is that new home owners, in their excitement, acquire unnecessary and dangerous amounts of debt buying furniture on account.”

He says you shouldn’t be tempted to buy everything for your house on hire purchase.

“You may not realise that these furniture accounts can lock you in for another 12 to 24 months before you can pay them off. This causes a great amount of unnecessary pressure on your budget and could put you at risk of defaulting on the more important costs, such as bond repayments.

He says you should look at borrowing the bare essentials or get family to donate old furniture that you will need to start off.

“Take your time buying furniture, hunt for second hand items and the best deals. And save for special items that you may want rather than buying them on account.”

There are a number of costs that are unavoidable and that you need to budget for over and above bond repayments. These responsibilities include water, lights and municipal rates. Water and electricity will be a factor of your own usage but municipal rates are the taxes that are paid to the municipality for providing essential services such as road maintenance. This is a fixed cost depending on your building size.

Home owners insurance will also be a new bill. It is important that the structure of your home is insured. It is also a good idea to insure your home contents and to work this into the household budget.

“Another cost that new home owners don’t take into account is the ongoing maintenance of a property,” says Madikizela.

Properties require care nearly all the time as wear and tear take effect, so home owners need to budget for this on an ongoing basis. It is critical to take care of the smaller problems, such as water leaks, before they develop into bigger problems and put the value of your property at risk.

“It is easy to be swept away in the excitement of owning your first home, but you need to do your sums and don’t be tempted to load yourself with unnecessary debt,” says Madikizela.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    • 20 Jun 2018
      The average size of bond granted in SA has grown 7,7% in the past 12 months to R934 000, according to BetterBond, the country’s biggest bond originator.
    • 19 Jun 2018
      In the current market, letting out a property can be a good option as rental demand remains strong, especially in the northern suburbs of Johannesburg. This is according to Chris Renecle, MD of Renprop. However he says that before homeowners let their property out, there are five key points they should make sure are covered before they market the property for rent and sign any lease agreements.
    • 19 Jun 2018
      The Capetonian dream is to live by the ocean with the iconic mountain making an appearance somewhere in the horizon. But, that dream comes with a hefty price tag that many simply cannot afford. But, should you venture some kilometres out of the city centre, entirely new realms of beachside bliss await you …
    • 19 Jun 2018
      Douw Steyn, one of the richest men in the country, recently allowed a rare glimpse into his Fourways Palazzo when it was featured on the SABC lifestyle programme Top Billing - and it is beyond your wildest dreams!
    • 18 Jun 2018
      Many home sellers are motivated to appoint estate agents because they know that the agency will carry the costs of advertising and marketing their property.
    • 18 Jun 2018
      When a property is sold when it has a tenant in occupation, the questions often raised are: “What happens to the tenant if the landlord sells the property?”, and what rights the tenant will have with regards to cancelling the lease or enforcing it, says Sunell Afrika, rentals manager for SAProperty.com.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK