Home loan advice for first-time buyers

Looking to buy your first house, flat, or other type of residential property? Be sure to read on for some critical advice on buying a house and applying for your first home loan…

Do your homework properly – www.propertymax.co.za
Informed buyers get better bargains. If you familiarise yourself with the property market and get a feel for what properties cost in a certain area, you will recognise a good deal immediately, while simultaneously ensuring that you don’t end up paying too much for a property that isn’t worth it.

Be realistic about what you can afford – Affordability Calculator
A good property doesn’t come cheap, and a good property buy is more than just a house – it’s also the location that counts. Yet everything comes at a price, and you may find that you have to sacrifice on space or an extra bedroom in order to buy a property in a more sought-after area. Don’t be disheartened – the challenge is to get into the property market and buy wisely. The last few years’ rapid growth in the property market seems set to continue, which should help you to afford a bigger, more valuable property as time progresses and property growth continues. But first, you have to make inroads into the market as a buyer!

Location is everything
If you wish to buy a property with good investment potential, the neighbourhood you buy in will be a key consideration. If you are looking to buy a family home, it may also be worth your while buying a house close to schools, crèches, etc.

Also attempt to find a home that is situated relatively close to your place of work, as traffic congestion and increasing commuting times can also influence a residential property’s price.

Read – and understand! – the fine print
Buying any property comes with a fair amount of administration. As a first-time homebuyer, you’ll need to familiarise yourself with the mortgage application process, so be sure to ask questions if you don’t understand something. Also have your mortgage contract documents and application forms explained to you in detail, and keep copies of all signed documents in a safe place.

Choose a home loan that best suits your needs
Unsure of which bond solution to choose? If you’re a first-time buyer, why not talk to one of our qualified home loan consultants. Who can advice you on how to meet the home loan requirements of first-time homebuyers.

Allow for interest rate increases
When calculating your budget, it is important to bear in mind that the prime interest rate will influence your monthly home loan instalments if your bond features a variable home loan rate. Unless you opt for a fixed rate home loan solution, any adjustments to the prime rate will directly affect your home loan interest rate.

If prime is lowered, your monthly instalments will in turn be lower, and visa versa. If it increases, however, your monthly instalments will increase by substantial amounts. As such, it is advisable to allow for potential interest rate hikes when calculating your budget – even before buying a house! Be sure to use our
bond calculators to see how big a loan you could qualify for, and also to assess how much you’ll need to allow for potential interest rate increases.

By choosing Mortgage Plus for a loan, you will get that continual service to make sure you are getting the best deal possible.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

First time buyer loans are rather straightfoward–they are for persons who are buying a home for the first time. Equity loans, on the other hand, are loans that are issued to borrowers who already own a home. The equity of the home is put up as collateral against the loan, meaning that if the buyer fails to meet expected payments, then he is at risk of losing his home.

Thus, first time buyer loans are different, since the borrower may not have collateral, such as a home to put on the burner, which is why the lender will consider the value of the home for purchase and use it in the equation to determine if the borrower is qualified for the loan. In other words, if the home purchased has equal equity to the mortgage loan, then the lender most likely will offer the loan.

If the equity on the home for purchase is below the loan amount, then the lender may require a