Affordability, availability and suitability. Whether this is your first tentative step on to the property ladder or you are an old hand looking for the perfect home for your retirement, achieve the right balance between these 3 principles will set you on your way to being a happy home owner.
Your first port of call. Knowing what you can afford means less time wasted on looking at properties that could be out of your reach. Remember: there is no point buying the house of your dreams if it's going to turn into a financial nightmare. Be prepared! Better yet, get pre-qualified for a home loan.
Making use of Bond calculators can help you answer questions like:
What home loan amount do I qualify for?
What will my monthly repayments be?
What if I pay extra each month?
Now that you know what you can afford (remembering any costs for improving the property) it’s time to take to the streets and see what kinds of properties are available where. Make a list of your needs, that is, the features that your home must have to fit your lifestyle. Be as rational, rather than emotional, as possible when making this list. Your Harcourts agent can help hugely here by advising you on what is on the market and what to expect in what areas. It's likely that you will have to compromise on some of your likes and dislikes so be prepared to be flexible.
Location, location, location! You can improve the property but you can't move it. Remember however, to think to the future of the area, not just what its current state is. You estate agent may even be able to help you find out of there are any new development plans of possibilities in the area – are they attractive or not?
You’ve found somewhere you like the look of and it's in your price range - do you go for it? Think laterally now - what does your future hold? If it's family, then can you expand the house? Are there schools close by? If it's retirement, are your family and friends nearby? Is there a hospital or clinic near-by? Ask the neighbors about crime in the area, noise levels, traffic congestion. Don't compromise on things that are important to you. If they annoy you now, they will only annoy you more later!
Lastly: Be patient and shop around. You may get lucky and fall in love with the first property you see, but you'll make a better decision if you look at a number of them instead.
Who wants to school themselves in ratios and amortisations and securitisations when there’s more appealing homework to tackle – like choosing fabric swatches and light fixtures? But before you can hit Builders to canvas the paint aisle you have to get the right financing for your new home. From independent advice to better interest rates (and better results), using a bond originator as your personal home-loan consultant comes with some major perks. “A bond originator is a very useful partner for the first-time homebuyer,” says ooba CEO Rhys Dyer, who explains that these bond experts will assess your financial situation as part of a ‘needs analysis’, and match your requirements to a wide range of loans from banks and other financial institutions; managing the process right through to settlement.
Here are five more good reasons to consider using a bond originator
What to expect when you meet with your bond originator
Your first meeting will usually take around an hour, and in that time, a qualified consultant will:
Ask what you are looking for in a home loan and understand the particulars of your situation
Calculate how much you may be able to borrow and what your repayments will be so you’ll know what sort of range you can buy in
Help you choose the loan and associated features that meets your needs
Explain the application fees and other charges associated with the loan
Explain the home-buying process end-to-end including making an offer, getting legal advice, exchanging contracts and transfer
The consultant will walk you through the application for the loan of your choice – if and when you are ready. You’ll need to have some documentation and information handy; your consultant will tell you what you need to submit to the bank you’ve chosen.
You should feel informed and confident in the next steps in the process when you leave your first appointment. And the good news is that your consultant will be with you every step of the way making the process very clear and simple.
It takes at least three months for the registration and transfer of a bond. But knowing what to do and where to get help will make the process considerably quicker and easier.
Here, our easy-to-understand guide takes you through the whole process of registering your bond and buying your home.
There are a number of people who will be involved in the bond registration process.
Note that the same attorney could be appointed to handle more than one or even all of the above transactions.
THE TIME FRAMES
While the transfer process follows a series of successive stages, the time period involved varies considerably. Generally the following guidelines apply:
Stage 1: The purchase / sale of the property
Property is traditionally sold by way of a written Offer to Purchase, signed by both the purchaser and the seller, as well as their spouses if they are married in community of property. Witnesses need to sign the Offer to Purchase, too. A verbal contract for the sale or financing of fixed property is invalid, according to South African law.
The Offer to Purchase must be carefully examined to ensure that it accurately reflects the parties’ full agreement, especially with regards to the amount payable, the method of payment, all verbal promises made by the seller or his or her estate agent, the incorporation of all special conditions to suit the parties’ particular needs, the time of the buyer’s physical occupation of the property (which may coincide with registration), and the transfer of the property.
If physical occupation and transfer do not coincide, the Offer to Purchase must specifically provide for occupational rent payable between the dates of occupation and transfer. If the sale is subject to the buyer obtaining a bond, this must also be specified in the Offer to Purchase, as must the period within which bond approval must be obtained to avoid the deal being delayed indefinitely.
Stage one is finalised when the agreement / Offer to Purchase is signed by both purchaser and seller. It should be noted that estate agents are not always party to the sale and therefore not obliged to attend the registration process.
Estate agents have their own Offer to Purchase, but an attorney can also draft one specifically suited to the needs of the parties concerned.
Stage 2: The payment of the deposit
The purchaser makes an initial payment (deposit) and receives a copy of the Offer to Purchase for his or her records, as does the seller. Simultaneously, the transferring attorney is furnished with the original deed or agreement of sale, making it possible to draw up the necessary documents. Finally, a copy is kept on file by the estate agency concerned.
Stage 3: The registering and approval of the bond
The purchaser applies for a bond with a bank – a bond originator will take care of this, cost free, on behalf of the purchaser. Once a bond has been granted by the bank, it advises the bond attorney to register the bond.
Fumigators may be instructed to inspect the property for infestation by beetles (it has become common practice for this condition to be added to the Offer to Purchase in coastal areas). Also, if the seller is not in possession of an electrical compliance certificate, plumbing compliance certificate or electrical fence compliance certificate, these will need to be obtained.
Factors that could delay the registration of a bond:
To make the home-buying process that much easier, South Africa’s leading home loan comparison service offers a range of home loan calculators, including those that determine bond affordability and bond repayments.
Get pre-qualified, or apply for a home loan with ooba home loans today.
While there are many benefits to putting down a deposit on your home, in today’s tough economic climate it may be more realistic to take out a 100% bond, especially if you’re a first-time buyer who does not have easy access to a deposit.
Indeed, if you fall into this category of homebuyer, you’re not alone. “More than half of all the applications received by ooba are from buyers who have no access to a deposit,” says Kay Geldenhuys, Head of Sales Fulfilment at South Africa’s largest bond originator ooba.
100% home loans in South Africa
According to Geldenhuys, close to 80% of these applicants are being approved for finance and three out of four are successful in their bid to secure a 100% bond. The rest are required to raise a deposit, and that is generally one that is between five and 10 percent of the purchase price.
“Contrary to the widely held belief that the chances of getting 100% financing are slim, these stats prove that, when correctly represented, buyers have a very good chance of obtaining a bond without a deposit,” she says.
However, Geldenhuys emphasises the importance of using a reputable bond originator. “Banks are willing to approve 100% bonds if they can see that you have a clean credit history and can comfortably afford the monthly repayment instalments. An experienced bond originator will ensure you are correctly represented to the financing institutions so that they view your application in a favourable light.
“It’s essential that these candidates evaluate their financial situation before applying for a bond,” she adds, noting that there are, equally, many advantages to putting down a deposit.
“By providing capital upfront in the home-buying process, you will avoid paying interest on that amount of money for the duration of your loan period, which can amount to a significant saving in the long term,” she explains.
“If, for instance, you purchase a R1 million property with no deposit at a 10% interest rate, you will pay approximately R9 650 per month over 20 years. At the end of the term of the home loan, you will have paid back around R2 316 052. On the other hand, with a R100 000 deposit, the monthly repayments will be approximately R8 685, and the total repayment will be around R2 084 447. Add the deposit to this and the total comes to R2 184 447 – making the total repayments some R131 605 cheaper than buying without a deposit.
“It also stands to reason that the smaller the risk for the bank, the more negotiable it will be on your interest rate,” she adds.
To gauge the affordability of your property price, and the likely chances of obtaining bond approval, it’s advisable to prequalify with a bond originator, a free service that ooba provides prior to the start of the home-buying process.
“Once you have an indication of the deposit required, you’ll be better positioned to consider the best approach needed to obtain your financing,” Geldenhuys says.
South Africa’s leading bond originator offers a range of home loan calculators to help people looking to buy a home determine what they can afford. Click here to access ooba’s free, online prequalification tool, the ooba Bond Indicator. Then, when you’re ready, you can get prequalified or apply for a home loan with ooba.
AS SOON AS YOU BEGIN TO PERSUE A DREAM.
LIFE WAKES UP, AND EVERYTHING HAS MEANING
A prequalification certificate establishes your credit rating and gives you an accurate indication of how much you can afford.
While not an absolute guarantee, 85% of all home loan applications with a prequalification certificate are approved.
A thorough analysis of your credit history, including your credit score which is determined by the frequency of payments of your retail accounts.
ooba is more likely to secure you a bond than your bank
Home loans are our only business, that’s why we are regarded as the best in the industry at getting bonds approved.
Pre-qualifying for a bond clears the path to your effortlessly making an offer on your dream home.
Longing to own your own home but can’t afford a deposit? These are the criteria banks apply when looking at applicants for a no-deposit bond.
For many people, buying a home is part of the great South African dream. Yet with the high cost of living, saving for a deposit can be extremely difficult.
Indeed, if you fall into this category of homebuyer, you’re not alone. “Nearly half of all the applications received by ooba are from buyers who have no access to a deposit,” says Kay Geldenhuys, Property Finance Processing Manager at South Africa’s largest bond originator.
“Contrary to popular belief, it’s not impossible to get 100% financing. In fact, a significant 74% – or three out of four – of our applicants are successful in securing a no-deposit bond, while the rest are required to raise a relatively small deposit, generally only one that is between five and 10% of the purchase price.”