Caption: Buying your first home should be one of the most exciting times of your life, but unforeseen costs and bad budgeting could destroy the dream, or at the very least cause unnecessary stress. Manja Kritzinger (above), CEO of Realtors International Durbanville, advises that comprehensive property budgeting is key to make the transaction as smooth as possible.

“Buying property for the first time is a daunting yet thrilling experience – it’s the beginning of a new chapter in making new, lasting memories and also the biggest financial decision a person will make. Those who are new to property investment should plan well in advance and be educated on the costs of buying their dream home. It all comes down to proper property budgeting,” says Kritzinger.

Kritzinger shares some tips and points to be aware of, especially for first-time property buyers.

Know the hidden costs

“Know exactly how much the buying process will cost. Things to be mindful of include transfer fees to get the property in your name, postage and petties, deeds office fee and transfer duty fees. Be mindful of these costs and budget accordingly,” says Kritzinger.

Hennie Mouton, Director at STBB Attorneys in Tyger Valley, says, “First-time buyers should note that properties of R750, 000 and less are not subject to transfer duty. Transfer duties will only apply to properties of greater value than R750, 000. Apart from transfer duty costs, financial institutions will also charge an initiation or valuation fee. When buying your first home, also make provision for rates and taxes and additional disbursement which ranges between R1, 000 and R3, 000 depending on the value of the transfer bond.”

Start saving early on

“The second step in property investment is to save for a deposit and ‘hidden’ costs such as bond registration fees. Start saving early on, as it will help you tremendously when applying for a home loan at a lending institute,” advises Kritzinger. Kritzinger adds that a deposit will not only be beneficial for buyers’ affordability score, but the monthly repayments will also be lower. It is also important to know that some lending institutes give 100% mortgage loans.

Up your credit score

“Another important step is to ensure you have a good credit profile – this will make it easier to get financing. Open credit and store accounts and pay these, as well as any other loans you have such as car instalments, timeously. Don’t miss payments or have an overdue account, as this will impact your credit score. It comes down to clever personal financial management,” guides Kritzinger.

Be mindful of the interest rate

“Your interest rate on your home loan will be based on the Prime Interest Rate. This is the amount added to your initial loan amount. A tip for first-time buyers is that the longer the term of your home loan, the higher your interest rate will be – to save a lot of money, try to make your term as short and realistic as possible,” shares Kritzinger.

“By taking all of these costs into account, you can start planning ahead and also budget according to what you can afford. There are many financial websites where you can calculate all the costs for purchasing your new dream home. It is also a useful tool to use to calculate your property affordability based on your income minus expenses, which provides you with a monetary value for what the financial institutes are likely to lend you,” concludes Kritzinger.

For more information about Realtors International Durbanville contact 021 975 5720 or visit www.realtorsdurbanville.co.za. Join Realtors International Durbanville’s Facebook page at https://www.facebook.com/RealtorsDurbanville.