It’s a buyers’ market | Home Loan Advice

You’re in the market for a new home. And according to property experts everywhere, you’re in luck. Indeed, talk to any agent anywhere in SA and you’ll be told – with absolute justification – that this is a classic buyer’s market. In other words, now is a really good time to buy a home and/or invest in property.

The reasons are simple:

The market is somewhat depressed, sales are slow (especially in the upper price range) and genuine sellers are keen to dispose of their properties and move on. Which means that buyers now have serious bargaining power.

The average first-time buyer’s purchase price has seen consistent growth over the past six months, due mostly to sustained lower interest rates combined with the ongoing easing in lending conditions. Rising housing costs and increased municipal and utilities tariffs, along with the changing economic and racial demographics among home buyers, are now influencing demand at the lower to middle end of the housing market.

The banks coming back to the party

A significant factor in the present market is the fact that South Africa’s banks are playing a little less hardball over financing home loans. There was consistent improvement in banks’ lending criteria in 2012, which has obviously had a positive impact on the effective approval rate. The reduction in interest rates of 650 basis points since 2008 has improved affordability and markedly reduced the cost of servicing a bond. These record low interest rates, coupled with subdued property price increases, a more relaxed attitude by the banks and lower deposit requirements will continue to prove beneficial to potential homeowners.

Is this really a good time to invest in property?

This might be a case of stating the obvious, but property should be an investment that will continue to grow in value in the years to come. Potential homebuyers and/or investors in South Africa should always research an area thoroughly and consider the following when purchasing property:

• Always look at the surrounding areas – what sort of infrastructure exists and what is the crime rate in the area?
• Make sure you’re going to be comfortable with the daily commute to work and the distance and time you will spend on the road each day.
• Try to purchase property that is relatively close to good schools. This advice applies even if you don’t have school-age children. When it is time to sell, strong school districts are often a top priority for home buyers, thus helping to boost property values.
• Always be on the lookout for facilities that can create unwanted noise or disturbances in the area – pubs, nightclubs, restaurants, service stations, shopping malls and so on.
• Potential buyers should start their property search online as property websites list properties for sale throughout SA. The big win here is the convenience of the entire operation – prices, areas, details of the dwelling and photographs all help guide you in your ultimate choice.
• An experienced and reputable estate agent has access to invaluable market information long before the public: he or she will know a great deal about homes that are new on the market and comparable prices. Working with a good agent will make the search process much easier.

If you would like to speak to a Professional Mortgage Specialist about your lending requirements, please phone Mortgage Plus Bond Originators on:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Pre-Approved mortgages and home loans

It is highly recommended that you get your mortgage loan pre-approved before you start looking for a new home. You will have a better chance of securing a new home mortgage if you are pre-approved, you want to have as many positive advantages as possible when shopping for a new home.

There are a few different types of mortgage loans for types of buyers, those who are not pre-qualified or pre-approved, those who are pre-qualified, and those who are pre-approved. In understanding the appeal of each type of buyer, you need to put yourself in the seller’s shoes. The buyer is a complete stranger who is asking that you remove your home from the market and trust that they can afford to buy it. As the seller, which type of buyer would you prefer:

Not pre-approved
These buyers provide no evidence that they can afford to purchase your property.

Pre-qualified
Pre-qualified buyers have met with a mortgage specialist and discussed their finances; income, expenses, assets and liabilities. The mortgage specialist has given the buyer a letter stating, based on financial conversation, what the buyer can afford.

Pre-approved
Pre-approved buyers have submitted a complete loan application and provided a mortgage specialist with written evidence of income, expenses, assets, liabilities and credit. All information has been verified by a lender. The mortgage specialist has provided this buyer with a pre-approval certificate stating that the buyer has been pre-approved for the loan to purchase the home. As a potential buyer, a pre-approval certificate will help you stand out to the seller, making your offer a more solid one, and giving you the competitive edge.

Never be satisfied with a verbal agreement, make sure you get all agreements in writing!

For example the seller may verbally agree to include the refrigerator in the sale, but it is not contained on the written purchase and sales agreement – you should not sign this until it is included. Only agreements that are written in a contract are enforceable – avoid oral agreements at all costs.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za