select
|

What late-blooming homeowners need to know

Although most people have learned a considerable amount by the time they reach their mid- to late-thirties, they may not know much at all about buying a house.

That’s because the age of first-time buyers is now much higher than it was a generation ago, and is still rising in many parts of the world thanks to high levels of student debt among people in their 20s, and a simultaneous trend towards later marriage and family creation, says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator.

“Our latest statistics show that in SA, for example, the average age of first-time buyers is now 34. And what that means is that they often also have quite different needs – and financial concerns – from those their parents had when they were acquiring their first properties.

“Good schools and short commutes, for example, are likely to be much more important, and not only because these often serve to underpin local home values. 

Today’s first-time buyers know that an area with great public schools can save them from having to send their children to costly private schools – and what a difference this could make to their family finances in the future.”

In addition, he says, 30-something buyers are more likely to be settled or settling into a career at a particular company and looking carefully at their commute times, especially if there are two income-earners in the family who must travel in different directions to get to work.

“And on top of that, such buyers are often not contemplating a second home purchase until after their children have grown up, so they have to be especially careful when making a choice between urban or suburban living. City living would most likely enable them to cut down on commuting and spend more time with their family, but would probably also mean a higher purchase price and less space and freedom for growing children.

“On the other hand, while suburbia tends to offer great value these days as well as child-friendly gardens, living there may well mean having to spend much more time and money to get to work.”

Next, Rademeyer says, buyers in their 30s have to manage their finances more closely, taking into account things like saving for their children’s tertiary education and their own retirement. “They may have more established careers and earn more than the previous generation of first-time buyers, and they may well qualify for bigger home loans. But just because they can borrow more does not mean they should.      

“When calculating how much you may borrow, lenders don't always include such financial necessities as retirement or university savings and future home improvements, and buyers in their 30s must be realistic about the additional financial responsibilities they will face as they age by not taking on a monthly payment that leaves them too little financial leeway.”

And finally, he says, the 30-somethings must try to avoid draining their savings to cover a deposit and transaction costs such as transfer duty, bond registration and legal fees, which usually have to be paid in cash. Doing so leaves buyers vulnerable to major unexpected expenses or events like major surgery for a child, job loss, or sudden disability.

“Indeed rather than put their savings at risk, they should find a lower-priced home and/ or one that will require less expenditure on upkeep.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
        
    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