Friday, 14 October 2011

First time Home Owners

Buying property is a responsibility that should not be assumed lightly. It is an especially daunting undertaking for young and inexperienced would-be home owners.

Though buying a home and establishing one's self in the property market is a good move financially speaking, younger buyers should seriously consider the implications of buying a house. They may find that owning a home restricts their travel plans and keeping up repayments may become quite a headache if the endeavour is not properly planned and well thought through. Before buying remember:

You can't simply "up and away"

Young people are standing on the brink of their careers and changes are inevitable. Should you commit to buying a house in Johannesburg and your boss ships you off to Cape Town shortly thereafter you could end up selling yourself short. Your house may not have appreciated in value to such an extent that the purchase costs are nullified. Ideally you should wait at least three years before selling.

How soon will you outgrow the house?

Buying the wrong property and then being forced to sell it too soon could cost you more than you imagine. Make a prediction as to where you may find yourself in 5 to 7 years time. As you grow older your needs will probably change considerably. You may decide to start a family or need an extra room to use as a study or studio. How much potential for change does the house have? Is there room to grow? Your property will only be a profitable long term buy if you choose wisely in this regard.

Time and money

At the end of the day your budget is the foundation of your purchase. Never disregard your recourses regardless how ideal the circumstances or the property you've found may be. If you can't afford the purchase it's the end of your home buying story. Calculate the monthly payments you can afford to make. Banks are unlikely to grant a maximum bond if the repayment encompasses more than 30% of your monthly income. Calculate conveyancing and transfer costs which will not be covered by the bond and consider asking the advice of a financial planner.

"You have more than your monthly repayments to keep in mind."

Hidden expenses deliver the final blow to many a dream of fireplaces, sun decks and daisies in the garden. You can overcome this by shopping around. Many lenders offer loan packages aimed specifically at first time home owners. These give you the option of borrowing more than the purchase price in order to cover extra costs.
For more information go to Realty-1

The costs won't disappear!

You have more than your monthly repayments to keep in mind. Find out how much rates, taxes, maintenance and insurance will cost and budget for them.

You may have more or unexpected expenses a few years after you buy, but you could also be earning more and what seems impossible today may be easily handled in future. Whether you decide to opt for borrowing your maximum loan amount or for the security of borrowing less, make sure that you can comfortably cope with the consequences.

Sectional title homes

If you are entering the property market for the first time, consider buying a sectional title home. The land is used optimally and for this reason it constitutes a smaller or cheaper component of the purchase price. Purchase prices often include VAT and in most cases sectional title homes have the added advantage of a more secure living environment.

In a new development it is usually not expected of buyers to contract with builders themselves as the developer will elect a builder to complete the entire project. If you are an inexperienced buyer it is problematic to judge how trustworthy a builder is, not to mention the myriad of other responsibilities that home buying requires. Buying a sectional title means one less thing to worry about!
For more information go to Sectional Titles