How To Get Home Loans In South Africa
Avoid the stress and mistakes most homeowners must endure when they buy a home by educating yourself about the options and fees associated with home loans.
First-time buyer home loans: Designed for people who have never financed the purchase of property before, this option allows qualified borrowers to finance more than 100% of the property value. The goal is to make it easier for new buyers to enter the market by wrapping some of the costs of a loan into the loan amount. In addition, there is no deposit requirement for first-time buyer home loans.
Fixed home loans have their own advantages and disadvantages. They have a fixed interest rate, generally for a period of one to two years. Though the fixed loan's interest rate is marginally higher than the current prime lending rate, it proves to be beneficial by protecting the home owners from the rising interest rates. On the other side, if the interest rates decline, the rate and payment will not be adjusted.
Variable home loans are the best choice when prime interest rates are on the decline. Initially, you start off with one rate rate you and the lender set together. And when the prime rate goes up or down, the rate of your loan follows.
Capped home loans: Buyers will only be able to receive the benefits of both the variable and fixed home loans, who meet the required qualification. Use this option caps to negotiate rate for a fixed period of time. you can also take advantage of decreasing interest rates which also safeguards you against raising interest rates. confirm if you can avail this option from your bank.
You should also take into consideration the costs of getting a home loan when you enter the market. Most buyers are not familiar with these costs and are often surprised to see how much they add up.
The Deposit: Unless you are a first-time buyer, your lender will require a deposit when you apply for a home loan. In most cases, the deposit amount is 20%, but can vary based of the value of the property.
Dictated by the Law Society, transfer and registration fees go to the attorneys registering property and the mortgage bond on that property. More expensive properties earn higher fees, also known as conveyancing fees.
Deeds Office levies and fees: It is the responsibility of the deeds office to register ownership and other rights associated with immovable property. The Department of Land Affairs oversees the responsibilities of this government office.
Rates and taxes: Before property can be transferred to your name, the rates due on the property must be paid in full for the financial year. As a buyer you will be responsible for a pro rated amount for the part of the year you will occupy the property. You will also be charged for a rates clearance fee certificate.
Be sure to calculate your moving costs, water, electrical and other household costs as you budget for your installments. And don't forget the costs of property and life insurance that also add to the overall costs of owning a home.
First-time buyer home loans: Designed for people who have never financed the purchase of property before, this option allows qualified borrowers to finance more than 100% of the property value. The goal is to make it easier for new buyers to enter the market by wrapping some of the costs of a loan into the loan amount. In addition, there is no deposit requirement for first-time buyer home loans.
Fixed home loans have their own advantages and disadvantages. They have a fixed interest rate, generally for a period of one to two years. Though the fixed loan's interest rate is marginally higher than the current prime lending rate, it proves to be beneficial by protecting the home owners from the rising interest rates. On the other side, if the interest rates decline, the rate and payment will not be adjusted.
Variable home loans are the best choice when prime interest rates are on the decline. Initially, you start off with one rate rate you and the lender set together. And when the prime rate goes up or down, the rate of your loan follows.
Capped home loans: Buyers will only be able to receive the benefits of both the variable and fixed home loans, who meet the required qualification. Use this option caps to negotiate rate for a fixed period of time. you can also take advantage of decreasing interest rates which also safeguards you against raising interest rates. confirm if you can avail this option from your bank.
You should also take into consideration the costs of getting a home loan when you enter the market. Most buyers are not familiar with these costs and are often surprised to see how much they add up.
The Deposit: Unless you are a first-time buyer, your lender will require a deposit when you apply for a home loan. In most cases, the deposit amount is 20%, but can vary based of the value of the property.
Dictated by the Law Society, transfer and registration fees go to the attorneys registering property and the mortgage bond on that property. More expensive properties earn higher fees, also known as conveyancing fees.
Deeds Office levies and fees: It is the responsibility of the deeds office to register ownership and other rights associated with immovable property. The Department of Land Affairs oversees the responsibilities of this government office.
Rates and taxes: Before property can be transferred to your name, the rates due on the property must be paid in full for the financial year. As a buyer you will be responsible for a pro rated amount for the part of the year you will occupy the property. You will also be charged for a rates clearance fee certificate.
Be sure to calculate your moving costs, water, electrical and other household costs as you budget for your installments. And don't forget the costs of property and life insurance that also add to the overall costs of owning a home.
About the Author:
Tom Martens is the marketing director for Homeloans-southafrica.co.za. South Arica's leading Home-loans portal
posted by Credit Counseling at
3:09 PM
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