Finding your perfect property is one of the most important and exciting decisions you'll ever make. It's not just about finding a place to live; it's about creating a space for lifelong memories and potentially generating greater financial freedom over time. Think of this as your roadmap to navigating this process successfully.
You can finance your property purchase over a long period. At the end of that term, you'll own a fully paid-for asset that should have grown in value. If you can't afford it alone, you might buy with someone else, but remember this is a long-term commitment and not something you can quickly undo if the relationship changes.
Before you even start browsing properties, there are five crucial things you need in place:
- 1. A Stable Job and Income: Lenders typically want to see you've been in a steady job for at least three months. You'll need payslips as proof. If you're self-employed, like a freelancer, it might be a bit more complex, but you'll need to provide proof of income, bank records showing regular, verifiable payments, and a statement of income and expenses, depending on the bank's requirements. Your bank records must clearly show your income.
- 2. A Good Credit Record and Affordability Check: Your income after deductions and living expenses needs to demonstrate you can realistically afford the home loan repayments. Building a solid credit score is essential. You can do this by using short-term credit, like a store account, and making regular payments over a few months to build that history.
- 3. Mortgage Loan Approval: This is key! Get an affordability check and home loan prequalification done before you start property hunting. Banks and mortgage originators offer online calculators for an initial assessment to figure out how much you can afford. Once you know your budget, you can confidently start looking online or with an agent who can help you make an offer and guide the finance application.
- 4. Funds for Deposit and Costs: While 100% home loans are sometimes possible for first-time buyers, you'll almost always have transaction costs on top of the loan that you need to cover upfront. There might also be a deposit required by the bank. These funds need to be readily available. They include transfer duty (if the property is over R1.1 million), along with transfer and bond registration costs. For example, on a R1 million property (where no transfer duty is payable), the transfer costs could be around R33,000 and bond registration around R38,000 – and this must be available upfront.
- 5. A Long-Term Commitment: Buying property is a significant financial investment and requires a lifelong commitment due to the long-term mortgage. Besides the financial side, properties need maintenance to keep their value and appreciate. Be aware that it usually takes several years to build up equity unless you put down a large deposit. Since property isn't an asset you can sell quickly, a long-term perspective is vital.
Navigating this path is both a smart financial step and a personal achievement. You'll need to balance the immediate costs with the potential future gains. Approaching it diligently will help you secure a stable investment and build your personal wealth.
When you start looking, it's a balance between your heart and your head. You want a property that fits your current lifestyle but also has the flexibility to grow and change with your family. But you must also be mindful of the long-term financial aspects to ensure the investment is sustainable.
Here's what to focus on during the hunt:
- Location: You can renovate a house, but you can never change its location. Think carefully about nearby schools (from creche to high school), and how long your commute will be to work, shops, doctors, libraries, and parks. It's also smart to investigate how the area might develop over the next five to ten years – is it established or still developing, and what plans are in place?
- Future-Proofing: Most families buy a home every five to ten years, so find a home that can adapt to your future needs, not just your current ones.
- Will your family need more bedrooms or bathrooms down the line?
- As kids grow, will you need separate living spaces?
- Is there space for a flatlet if aging parents might need to move in?
- Check if there are any title deed or zoning rules that could stop you from changing or renovating the property as your needs change.
- Affordability: If you're starting out younger, you have the advantage of time. Your earning potential is likely to grow, making today's tight budget potentially easier later. However, the key is finding the "sweet spot". Buy a home you can realistically afford right now, covering all costs like the bond, insurance, maintenance, and rates. At the same time, choose a property that can still accommodate your growing family. It’s about balancing ambition with practicality – a home that might stretch you a little initially but sets you up for financial stability and personal growth.
Finding the right property takes time, careful consideration, and good guidance. Keeping your priorities straight, thinking ahead, and leaning on the expertise of a skilled real estate agent makes the process much easier and less stressful. A good agent can help you avoid costly mistakes and provide valuable support.
