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The transfer costs first-time home buyers can expect to pay

There are additional expenses to buying a home, such as transfer fees. Here’s an indication of what first-time home buyers can expect to pay on transfer costs. Costs For First-Time Home Buyers

Article summary

  • Aside from matching the purchase price of a home, you’ll also have to pay bond registration and transfer costs.
  • Transfer costs vary according to the value of the home.
  • Instead of paying transfer costs up front, you can apply for a 105% home loan, which includes transfer and bond registration costs in the monthly repayments.

Taking the plunge and putting in an offer to purchase your first home is an exciting prospect for the first-time home buyer. But one needs to be aware of the admin that accompanies a home loan application. There’s more to buying a home than simply coming up with the money to match the purchase price.

Buying a home is the biggest financial commitment that most people will make in their lifetime. There are many other expenses to factor in, and it’s worth planning for these in advance so that you can be sure you have the finances available.

Bond registration and transfer fees are probably the biggest costs associated with buying a home.

What are transfer costs?

Transfer fees are paid to a transferring attorney, appointed by the property’s seller to transfer ownership to you.

This cost varies, depending on the purchase price. It comprises the conveyancer’s fees, as well as the transfer duty payable to SARS.

Bear in mind that you will only have to pay transfer duty on properties worth more than R1 000 000.

Transfer costs: What can first-time home buyers expect?

You can get an idea of what those costs will be by using ooba Home Loans’ Transfer Cost Calculator.

For example, on a R1 million bond for a freehold property, the bond registration cost estimate would be R30 905 (incl. VAT), and the transfer cost estimate would be R24 867 (incl. VAT).

If you’re applying for a 100% home loan (a home loan that does not require a deposit), bear in mind that the bank is less likely to cover the costs of transfer.

Can transfer fees be included in the bond?

There is the option of a 105% home loan, in which the extra 5% covers additional costs like the transfer and bond registration costs, including them in your monthly repayments rather than requiring you to pay them up front.

What other fees can a first-time home buyer expect to pay?

Additional fees that first-time home buyers need to be aware of include:

  • Bond registration costs The bank appoints a bond attorney to register the bond in your name, and that attorney is owed a fee. Our Transfer Cost calculator can help you determine the potential bond registration costs as well as the transfer cost.
  • Moving costs
  • Repairs and maintenance While some homes are in perfect condition on the day of transfer, chances are you’ll have to do some cleaning, repainting and general repairs to make yours feel more like home. Some of these will be essential, others will relate to your own personal taste or budget.
  • Utility costs If you are buying a freehold property (not a sectional title), you will need to register for your water and electricity connection, and your telephone and internet lines if you need those.
  • Rates and levies If you have purchased a freehold property, you will have to pay rates and taxes, which can be anywhere from a couple of hundred to a few thousand rand per month. If you have bought into a sectional title, the apartment block’s body corporate will have set a levy to pay every month for the general upkeep of the buildings.
  • Insurance Your bank will insist that you have home insurance in place to cover any structural damage to the property.

Improve your chances of acquiring a 105% bond

The 105% bond is a great opportunity for first-time home buyers to get on the property ladder. ooba Home Loans can improve your chances of acquiring one by applying to multiple banks on your behalf (some may be more willing to offer you a 105% bond than others, depending on their lending criteria).

ooba Home Loans also improves your chances of getting a good interest rate. Money saved by getting a lower interest rate can then be put toward the transfer costs.

In addition to all this, ooba Home Loans offers a range of tools that make the home buying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.

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Ooba home loans services are simply the best. My Consultant Bianca Dancer was so hands on and helpful from the get go. She guided me through the entire process and put me at ease being a first time buyer. I highly recommend their services.

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Estelle Vorster was really helpful in securing the best deal for my home loan, she not only negotiated a lower interest rate she went as far as securing 50% discount on the transfer costs.

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