select
|

Banks still willing to lend - Standard Bank

Despite tough economic conditions, finance is available for those wishing to buy properties, provided they meet the necessary requirements, says Steven Barker, director of home loans at Standard Bank.

"In addition to meeting the necessary financial requirements, you should also put a lot of thought into the property you intend to purchase. Buyers should, for instance, investigate the area in which the house is situated and the average value of properties in the suburb. The property should also be examined for possible defects such as poor plumbing, potential electrical problems and structural concerns such as rising damp."

Barker also advocates a thorough understanding of the type of property earmarked for purchase as the differences between freehold and sectional title properties vary greatly.

Illustrating his point, Barker says not all sectional title complexes are run efficiently and can be burdened with outstanding debts. Poor management may also result in higher levies or special levies, which will cut into your monthly expenses and affect property values for future sale opportunities.

"And even if the complex is financially sound and well run, as a home owner, you need to be an active member of the trustee board, as important decisions are made at these meetings that will impact your pocket and property," notes Barker.

Once you are satisfied with the location and condition of the property, the financial planning process begins. Steps to be taken in this regard include:

Checking your credit history: when banks assess a person for a loan, their credit history plays a major part in whether they are viewed as a candidate. It also pays to ensure that any outstanding debts are settled and that any accounts you may have are correctly serviced

Affordability. 

This includes:

  • Making sure that you have sufficient money to pay a deposit on the house as 100 percent bonds are rarely awarded these days;
  • Remember the additional costs. These include attorney's fees, transfer costs and registration fees, which are roughly around 8 percent of the purchase price of the property;
  • Enquire about the rates and taxes that will be payable on the property;
  • Plan for the one-off costs such as electricity deposits and consider what additions such as added security protocols are likely to cost;
  • Check what insuring the property will cost you on a monthly basis; and,
  • Although not always a requirement, you should also consider taking out credit life cover which will cover the outstanding balance on your home loan in the event of events such as disability, retrenchment and death.

"Your planning should also take into account future financial variables such as interest rate increases. Before purchasing a property, be honest with yourself and gauge whether or not your current or future personal cash flow can cope with increased payments if interest rates should rise. By preparing a personal budget which allows for costs to increase, you will ensure that you avoid financial difficulties at a later date."

Lastly, Barker says it's wise to take a proactive approach to monthly bond payments when buying a house as this can yield future rewards too.

"If you buy a house and can afford to pay extra money into your bond, do so as the benefits can be significant. Any additional money paid in is credited against the account and saves on interest costs. These savings can be significant and knock years off your repayment period.

(Business Report)


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
    • 17 Apr 2018
      The recent interest rate cut has stoked the coals in the first-time buyer’s market. At least for the next two months until the next interest rate announcement, homeowners are guaranteed lower monthly instalments than in the previous quarter. But, is it wise to take out a 100% bond just to enter the property market while interest rates are low?
        
    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