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
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
    • 21 Feb 2018
      These days most buyers are using online property portals like Private Property when house hunting due to the convenience, up to date information and variety on offer. “The property portals have revolutionised the way buyers shop, but they do need to be cautious – viewing photos online is no replacement for viewing the property in person,” says Bruce Swain, CEO of Leapfrog Property Group.
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
        
    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