Owning your own home opens up a world of possibilities, and it need not be a distant dream. As more and more people look to take their first step onto the property ladder, more home loan providers are seeing the value in gearing their services toward the needs of first-time home buyers.
Of course, since first-time home buyers are less likely to be familiar with the home-buying process, they’re the ones that can benefit the most from expert guidance.
First-time home buyers: Your questions answered
Cheryl Zartz, a property finance specialist at South Africa’s leading home loan comparison service, ooba home loans, answers some of the most pressing questions that first-time home buyers have about the home-buying process:
1. How do I determine what I can afford?
Cheryl Zartz recommends that first time home buyers undergo a prequalification process, which provides the opportunity to do an affordability check and a credit check simultaneously.
You can get yourself prequalified by an expert at ooba home loans; You will receive a prequalification certificate, which you can use when applying for a home loan.
As an alternative to being prequalified by an expert, you can do it yourself, using ooba home loans’ free, online prequalification tool, the Bond Indicator, It enables you to check your credit score, and determine what you can realistically afford. It will also generate a certificate, just like the one you would receive when prequalifying with an expert.
2. What size deposit do I need?
This varies depending on the price of the property you want to purchase, and while a deposit is not always required, try to put down 20% or more if you can, as the bank is more likely to offer you a better rate as the risk of the loan is reduced
Cheryl points out that, while ooba home loans does encourage their clients to provide a deposit, more and more people are taking loans at 100% (meaning no deposit required). For first-time home buyers, many of whom lack a deposit, a 100% home loan has become a realistic option.
3. What will my transfer cost be?
The property seller appoints an attorney to transfer legal ownership of the property to you, and the transfer duty refers to the fee you will have to pay that attorney. It is one of the largest costs associated with buying a home.
You can use ooba home loans’ transfer cost calculator to determine what your transfer cost will be, although it must be stressed that this provides only a rough estimation.
4. What will the monthly repayment on my bond be?
ooba home loan’s Bond Repayment Calculator can provide an estimation of what the monthly repayment amount will be. Of course, it cannot predict what interest rate the bank will grant you, but the prime interest rate serves as a solid base when calculating your monthly bond repayment.
You can use the Bond Repayment Calculator to get an estimate. Just insert the price of the property, the loan term (usually 20 or 30 years, but can be less), the interest rate (the prime interest rate is usually used) and the size of your deposit.
5. What is the process for obtaining a home loan?
The first step in the home buying process is to get yourself pre-approved. This will help you determine what you can afford. Then it’s a matter of finding a property that meets your requirements, and applying for a home loan.
A home loan comparison service such as ooba home loans can apply to multiple banks on your behalf, and can mediate between yourself and the banks. They will help you resolve any issues up until bond registration, at which point the bank takes over.
Take your first step toward home ownership
Prequalification and home loan application; two essential steps to home ownership that are made easier with the services of a home loan comparison service like ooba home loans, who can apply to multiple banks on your behalf and thus secure you the best rate.
Applying for a home loan with ooba home loans, as opposed to applying directly through your bank, increases your chances of securing home loan approval by 36%. So use the Bond Indicator to determine what you can afford, and when you’re ready, apply for a home loan with ooba home loans.