Financial tips for buying a house

Financial tips for buying a house

Property or housing remains the most secure investment option a family or an individual can consider. This form of investment can be done through cash transactions for those who can afford or even through finance from a financial institution.The whole process however can be very daunting for many especially first time buyers who are not sure of whats important.The factors listed below will go a long way in assisting many be aware of what matters.

Budget – Determining your price range is key before shopping around for properties. Bond or home loan originators can help you determine your budget and speed up bond process by negotiating with multiple financial institutions on your behalf. These bond originators are paid in form of commission based on the mortgage amount they secure, so you don’t incur any consulting fees.

Location – Property investment should appreciate in value as years go by, the location of the property will assist in achieving this. Factors which are very important in this regard include infrastructure, level of security and convenience to social facilities. Infrastructure refers to the basic facilities in the area such as roads, the better the infrastructure the more valuable the property. Level of security will always be of utmost importance. Social facilities include schools, shopping centres, hospitals, churches etc.

Availability – Searching for the right property which is available at the right time can be very tricky. It’s never a bad idea to use estate agents and property websites. Estate agents often have access to invaluable market information that the public might not be aware of. Online property websites allow you to narrow down your search to the finest detail and enable you to view information and photos of the property from home comfort.

Structural aspects of the property – It is always a good idea to look out for any defects and plans for alterations. Defects are the visible problems associated with the property such as wall cracks, sagging gutters, broken windows, missing tiles, geyser problems etc. These should be rectified before purchase or even analysed to determine whether they are an indication of more serious future problems. Make sure you consult the local municipality whether all buildings on the property are approved so that you don’t embark on illegal alterations after purchasing the property.

Negotiating purchase price – Always check the prices of recent property sales in the preferred area and current market conditions. Always bear in mind some of the costs associated with purchasing a property. These costs include transfer duty which is calculated according to a sliding scale based on the property value. VAT if the property is bought directly from the developer or builder. Conveyance fees which are usually added 1%-2% to the purchase price. Bond expenses which include initiation fee, legal fees, stamp duty and bond registration costs based on the value of the bond. Fees payable to the deeds office for the registration of ownership, including a levy for the registration of a bond with the deeds office.

The above tips will certainly assist any property buyer in South Africa.

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