Plan well before buying a house

A HOUSE is by far the largest purchase most individuals will ever make in their life, so it should warrant an equivalent amount of thought and planning.

As the old axiom goes, the three most important things to remember when buying a house are location, location, location.

It is much better to buy a smaller house in a better neighbourhood than to buy a larger house in a neighbourhood that is less desirable.

Similar to buying a car, you need to first figure out your needs, both immediate and long term.

Are you a young couple who is planning a large family or are you an older couple who already have children?

Do you spend a lot of time indoors? Do you entertain frequently? Do you look forward to enjoying a large backyard with landscaping and gardening?

How long a commute do you want to have to work and how close are amenities such as schools, shops and cinemas?

You also need to decide what features of a house are important to you.

Are you looking for a certain number of rooms, do you need a separate play area for children and do you need a large and spacious kitchen?

Remember in your considerations that this may not be the only house you will ever own, so you need to find a compromise between your current means and your future needs.

Once you’ve identified the ideal house, you need to match that with your budget and the types of locations that fit what you’re looking for.

Depending on your budget, you might have to make compromises in location, size or features and you will also have to determine whether the perfect house is even available on the market.

Many homeowners prefer to have a house built new so that they can customise it the way they want, although this normally comes at a premium.

You also have flexibility in how you finance a house. Similar to other loans, shopping around for the best home loan may be tedious, but can save you thousands or tens of thousands of rands over the long term.

The best strategy is to shop around with Mortgage Plus first to get the best rate and terms and help you feel comfortable with your budget and price range, then arrange a guaranteed pre-approval to not only make the house-shopping process simpler, but to also streamline the financing that will come after you’ve chosen your dream home.

There are different kinds of mortgages which may suit your needs differently. Talk to Morne Prinsloo, who will advise you on the different options.

For traditional mortgages, your options normally fall into one of two categories: fixed or variable rates. Fixed rate mortgages may offer more long-term stability and less risk, but the rates are normally a few percent higher than the bank’s prime rate.

By comparison, variable rates are lower, but they follow the bank’s rate, which fluctuates day in and day out. What this means is that you might pay less for a time, but there is the risk that the rates will later climb up.

This is a calculated risk on where the future interest market rate will go, so it may be worthwhile to do research and gauge where the financial experts feel the interest rates are trending.

Depending on your assets and financial wellbeing, you might have other options available to you, such as flexible, secure equity lines of credit which allow you to buy your house using the equivalent to a line of credit.

The advantage here is the more you pay off the principal amount initially, the less interest you pay every month and it allows you to immediately re-use the equity that you’ve paid off.

For example, if you borrowed R100000 using this approach and then pay off R10000, you would have that R10000 to re-use on other purchases or renovations if needed.

Regardless of the financing method, another important strategy for reducing the overall cost of your house is to save up as much as you can and put down a larger down payment up front.

This not only allows you to borrow less from the bank or any other financial institution, thus incurring less interest charges, but you will often also get better interest rates and fewer supplemental charges because the bank will consider your mortgage less of a risk.

This applies to almost any kind of borrowing: the more risk the bank has to take on, the larger the premium that they will pass on to you. – personal finance tips

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

Shopping For The Best Home Loan

Finding the perfect home is a task, but shopping for the best home loan can be even more tedious.  With so many lenders (Banks)  promising low rates, closing costs and little or no down payment requirements, it’s often difficult to know which way to turn.  Luckily, there are several steps that you can take to find the right lender for your individual needs through Mortgage Plus – www.mortgagepluscc.co.za

Assess Your Situation

Do you know what your credit score is?  If not, you should.  Most lenders rely on this triple digit number to determine both your creditworthiness and interest rates.  If you have excellent credit, you can probably work with almost any lender.  If you have severe blemishes in your financial past, however, finding the right lender may require a little more footwork.

How much money do you have for a down payment?  If you are on a budget, you will need to choose a lender that can help to get you into a home with a minimal down payment.  Knowing where you stand will give you a good idea as to which lender you need to work with.

Compare Rates

As is the case with anything in life, it pays to shop wisely.  Because a home is the largest investment that most people will ever make, it stands to reason that comparison shopping is a must.  As you speak with various lenders, ask about their rates, loan terms, qualification process and down payment requirements.

Interest rates change often, which means locking in your rates when they are low can save you a bundle of money.  Because there are so many lenders competing for your business, you will be greeted with plenty of appealing offers, including low rates, closing costs and down payment requirements.

Demand the Best

You are the one buying the home, so you should be the one to choose the length of your loan term.  With the exception of a situation where payments are simply unaffordable, it’s up to you to decide how long you want to pay for a house.  Many homebuyers prefer a longer loan term to keep the payments low, while others want to get the home paid for as quickly as possible with a shorter term.  It’s important to keep in mind that the longer you pay for a home, the more money you will end up spending in interest.

It’s a good idea to talk to Mortgage Plus to accommodate your needs.  Even If you’re in doubt about which lender to choose or just need a little guidance, Mortgage Plus will be more than happy to assist you in making your dream of home ownership become a reality.

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