Getting prequalified for a home loan is the logical thing to do before you even start looking to buy a new house in SA. This is one of the reasons we recommend waiting at least a year after getting married to buy a house. If you want to buy a house, you’ll need a credit score of at least 650 so you can get a loan with a decent interest rate. The first step is to ensure you know what you can afford, and the kind of home you wish to purchase. The aforementioned Bond Indicator, as well as being able to determine your affordability, can also provide an estimate of your credit score. Buying a house is a big financial commitment, and can be a lengthy exercise. Rightmove.co.uk lists the very latest property in South Africa. See a home buying checklist with a step-by-step guide to buying a house, including all the to-dos to make your dream home yours. Once it’s all done, time to move in and enjoy your new home. Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. The path is well signposted, and there are expert advisors who can help you along the way. The offer to purchase should include a requirement for a home inspection. This is your opportunity to discover any latent defects in the property, and it’s important to be aware of what your rights are when it comes to this issue. You can still get a home loan if the bank declined your initial application, as ooba home loans has been successful in securing home loan financing for almost two in every three applications that are initially turned down by a bank. There’ll be nothing left to do but start all over again. Terms and Conditions    Privacy Policy     Promotion of Access to Information, The ooba group subsidiaries Property Protector Financial Services and ooba Administration Services are Authorised Financial Services Providers (FSP No’s: 216 & 46293). Here is a home buyer’s guide that provides advice to help make the home-buying experience as … This will be an invaluable guideline during your house hunt, and furthermore, the Bond Indicator will issue you with an ooba Bond Indicator Certificate that you can submit when applying for a home loan (more on that later). “Rough estimates of what you think you can afford just aren’t good enough in these days of stricter lending policies from financial institutions,” says Rhys Dyer, CEO of ooba home loans, South Africa’s leading home loan comparison service. Inheriting a house — while a generous gift from a loved one — kicks off a process that can be fraught with emotion. However, buying property is a big decision and it can be hard to know where to start – especially if you are a first-time buyer! Another way to gain prequalification is to get yourself verified by an expert. They receive a fee from the bank. Also bear in mind that the seller is legally obligated to disclose any known defects in the building. Ever heard someone say, “I sold my flat and bought a house in 48 hours?” Or “Offer accepted with only bond approval outstanding?” “Only” is a big word, in this instance, because imagine the disappointment if it all amounts to nothing and the banks don’t give the thumbs up for the home loan. Download an Offer to Purchase contract and along with other documentation and submit this to the Seller. If it’s at the top of the price range it might be hard to resell at a profit, but if it’s at the lower end you can only benefit when prices of other homes begin to increase in value. The auction house will hold the reservation fee until contracts are exchanged. Here is our six point plan to help make the home-buying experience as easy and problem free as possible. The process is handed over to attorneys, who will handle the transfer of property from the seller to you and the registration of the bond over your property. Use our calculators to get an idea of how much you can borrow, and … A good starting point would be to use a bond affordability tool, such as ooba’s Bond Indicator, which is a free, online tool. How does your future home compare? “It’s true that anyone can look for a home, and even get a peek inside, without the help of an estate agent but, unless you have the time to make house shopping a full-time job, chances are an agent will be able to match you with your perfect property considerably faster,” says Rhys Dyer. Of course, the first step is having a clear idea of what exactly those requirements are before embarking on a house hunt. BUYING A HOUSE HAS NEVER BEEN EASIER. For example, if your monthly gross income is $4,000, you multiply this number by 0.43 to get $1,720, which is the total you should spend on debt payments. For example, if you wanted to buy a house worth £200,000 with a 95% mortgage you would put down £10,000 of your own money, and borrow the remaining £190,000.. Read about insurance in South Africa. Start with ooba home loans’ free, online prequalification tool, the ooba Bond Indicator. Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our website. When you’re confident enough in the process to go ahead with your purchase, bear in mind that ooba Home Loans offers a range of tools that make the home buying process a lot easier. Step 2 – Assess your credit record. If not, you’ll need to do a bit more research into the process of buying a house in SA. Talk about it. With such an assorted wealth of resources in one sunny land, finding the right spot to buy property can be a daunting task. Now the part people generally enjoy most about the home-buying process, the house hunt itself. Study the documents you’ll have to sign in advance and make a list of questions you want to ask. Step 2: Document preparation. Estate agents generally act for the seller and the transferring attorneys / solicitors are nominated and instructed by the seller. © 2021 ooba (Pty) Ltd. All rights reserved. DIY with our online prequalification tool, or speak to an expert. Bear in mind you will have to pay a transfer duty to the South African Revenue Services (SARS). Their knowledge of the housing market, and their ability to handle paperwork and deal with sellers on your behalf, will make for a much smoother process. Once you and the seller have come to an agreement, the next step is acquiring a home loan to fund your purchase. Different banks have different requirements for when people want to take out a bond for a house. Get home buying tips delivered straight to your inbox. Save for a mortgage deposit. In amongst that is the stress of getting in early to view the property and put in an offer before anybody else does. You’re likely receiving this property as a result of a loved one’s death, and the financial decisions that come with inheriting property can be stressful and confusing. Are you close to a major road or highway? For example, if an inspector says a foundation is cracked but it’s nothing to worry about, start worrying – and get a second opinion. As far as your bank is concerned, your credit score is a big number above your head that tells them how much of a risk you are. Of course, this is also the most difficult part of the process, as this will all be for naught if you don’t find a home that meets your requirements. Once the home loan has been approved, the conveyancing attorney prepares the documentation for signature by all parties. We are pleased to offer a range of property in South Africa. Have questions about buying, selling or renting during COVID-19? Costs of buying property in South Africa. The steps to buying a house can be confusing and long: Buying a house isn't as simple as clicking a Buy Now button. Naturally, the higher the better, and a high credit score rating is one of the most valuable personal finance assets you can have. Your credit score indicates to your bank whether your past debt repayment behaviour will make you a good risk or not. Understanding the costs. 1. Understanding the transfer of property process in South Africa We spoke to four big banks in South Africa about their tips for buying a house. Give some thought to: Once you have a clear idea of what you want, you can begin the house hunt. You have decided to enter the property market for the first time - but what next? But while it may seem daunting at first, it’s not like you’ll be wandering uncharted territory. It’s worth the money to find any structural problems with the house that could cost you thousands to repair further down the line. Before signing the contract you should obtain advice from a solicitor, as well as any other expert you require (ie. Banking on a budget. Buying a home Buying a house is more than just an investment, it is a place to call home and create memories that will last a lifetime. Follow these home-buying steps: 1. check credit, 2. set budget, 3. find agent, 4. get pre-approved, 5. shop, 6. make offer, 7. inspect, 8. finance, 9. insure, 10. close. Checklist for existing home owners. Then, once you’ve found your dream home, you’ll need to come to an agreement with the seller by signing an offer to purchase, and you’ll need to get access to finance from a lender (usually a bank) by applying for a home loan. The conveyancing attorney receives the deed of sale and all the necessary documents required to register the transfer of the property. “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,” suggests Rhys Dyer. Before a person begins the process of buying a house he or she will need to know what they can afford. Checklist for first-time buyers. While it’s commonly assumed that estate agents work solely for sellers, they are in fact a great asset to house buyers too. Property in South Africa. Once you have found your perfect home, confirm your choice by accessing detailed information through the Property Valuations Report. Finding the right real estate agent is key, so be sure to … Here’s what you will need to do to get yourself ready to take on the … It’s a good idea to ask your estate agent for a copy of the documents you will be asked to sign if you decide to buy the property and read them ahead of time to make sure you understand what is expected of you. To check your credit score, download a credit monitoring app. Bear in mind that, as Rhys Dyer explains, “far from being simply an agreement, an offer to purchase is a binding contract; once you make an offer, you cannot easily change it”. You’ll want to obtain this information before embarking on the home-buying process. You can use an estate agent to make the search easier. Ask the estate agent for a list of similar properties that have sold there in the past year. As one of the most significant investments you’ll ever make, it should come as no surprise that purchasing a home is an extensive process. a financial adviser). Terms and Conditions    Privacy Policy     Promotion of Access to Information, The ooba group subsidiaries Property Protector Financial Services and ooba Administration Services are Authorised Financial Services Providers (FSP No’s: 216 & 46293). The process of buying a house in SA can be a whirlwind of activity from the time you see the for-sale advertisement to the point when you’re ready to make an offer to purchase. Buying a house in South Africa: A step-by-step guide. If you are looking for your dream property in South Africa, you have come to the right place! To make the home buying process that much easier, consider employing the services of a home loan comparison service like ooba home loans, who among other services, offer a range of home loan calculators that can help you determine exactly what you can afford. The buying process can be rather complicated and lengthy but here are some general guidelines to assist you every step of the way. Buying a house is a big financial commitment, and can be a lengthy exercise. This will provide you with your credit score, a summary of your affordability, and a realistic indication of your price ceiling. Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our website. Buying a house with cash will make you feel like a million bucks. For RE/MAX clients, buying property in South Africa is a simple, stress-free process, from the moment they see their … There’s no harm in getting a second opinion if you’re not happy with the inspection report. All in all, Rhys Dyer estimates 69 working days for your bond to go from ‘granted’ to ‘registered’, and attorneys will be on-hand to guide you every step of the way. Once you’ve found a property, to buy a house in South Africa you’ll need to provide a 10% deposit straight away. Mortgages and home loans in South Africa Rules for home loans in South Africa may differ to those of your home country. Get opinions on schools in the area (even if that’s not an issue for you now, it might be when you want to resell). How to buy property without a home loan It is important that there is more than one way to go about purchasing a property in South Africa, you even have options when it comes to the deposit. Make an Offer to Purchase. Checking your credit score will help you determine your financing options; … Work out what you can afford. So you’ve got your offer to purchase and your home loan secured…what’s left to do after your bond is approved? Then, once you’ve found a home that meets your requirements, you can apply for a home loan. Find property in South Africa with Rightmove.co.uk - the UK's number one property website. It does not legally bind the winning bidder to buy the property but reserves you the right to exchange contracts and complete on the property at the agreed price within 56 days of the bid being accepted. You won’t inherit someone else's worn-out carpeting or have to look at some kid's initials scrawled into once-wet cement. The latter is especially useful, because the home loan comparison service (or bond originator, as they’re sometimes called) will send your application to multiple banks in order to secure you the best deal. It’s important to have a full understanding of what the agreement entails before signing it. Before you make an offer on a house, negotiate the selling price and other property specific factors, such as fixtures and dates. The process of buying and selling a house is expensive, so make sure you feel confident you’ll be in that area for the next five to seven years. Getting your bucks in a row. Find an estate agent you can develop a good working relationship with (consider asking friends and relatives for recommendations). If they’re unavailable for some reason, the estate agent may be able to assist you with that information. Step 3 – Find a real estate agent. Is there air traffic overhead? Useful house hunting tips include scheduling house viewings for weekdays (so as to avoid the weekend rush), taking your own photos (rather than relying on agent’s photos, which are intended for marketing purposes), and coordinating your viewings so as to ensure they take place within a short window of time (otherwise there’s a risk of houses you view being sold before you’ve made your final decision). These are classed as non-resident loans and are subject to foreign exchange approval from the South African Reserve Bank. Buying a house in South Africa If you’re planning to buy a house in South Africa, these expert tips and overview of costs can help you prepare for buying property in South Africa. Get opinions on schools in the area (even if that’s not an issue for you now, it might be … Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. Through various calculations based on your transactional records, the credit bureau will provide your bank with a three-digit number ranging between 0 and 999. Get home buying tips delivered straight to your inbox. Visit the local police station and ask about crime statistics. Start with their Bond Calculator, then use the ooba Home Loans Bond Indicator to determine what you can afford. Like the estate agent, bond originators come at no cost to the buyer. In the meantime, ensure you pay your bills on time, and don’t borrow more than you can afford; two of the most effective measures for securing a clear credit record. This is an agreement between you and the seller that stipulates the terms and conditions for the sale of the property. Typically this comes down to how much of a loan he or she can … In the meantime, you should start putting some money aside for your first bond repayment, as well as any home renovations you’re hoping to undertake. If you’re unsure where to begin, here’s a handy step-by-step guide to buying a house in South Africa, so you can approach one of the most important decisions you’ll make with clarity and focus: Before you start your house search, you should have a very clear idea of what financing is available to you for the transaction. Make sure you have a good chance of getting bond approval before putting in an offer on a new house. This is also to ensure there are no issues with the property that could later bite you (ie. When you buy property in South Africa, you’ll typically pay a transfer duty plus a registration fee and conveyancing fee. The entire process of buying a home can now be done remotely by both sellers and buyers. You’ll usually need to build up a deposit of at least 5% of the price of the property you want to buy. Good schools are a drawcard for young families. If you’ve already done your homework and have decided on the area you want to buy into, you’ll save yourself a lot of heartache if you investigate the financial requirements upfront. Step 1 – Determine what you can afford. Do your sums. This will also help prepare you to ask questions about things that might affect your decision. This is because pre-contract is the best time for you and your solicitor to review the purchase, including: 1. The less of a risk the bank determines you to be, the more favourable your interest rate. Once you’ve found your dream home, and got all your finances in order, you’re ready to sign an offer to purchase. For too long now, the process of buying and selling South African property and real estate has favoured one party: the seller. The seller will also receive a copy of the report, and it’s up to you whether to request that necessary repairs be made. Carefully choose your desired area by assessing convenience of location, checking crime statistics and talking to neighbours. Furthermore, their services are free, as their commission is paid by the seller. A home is a significant investment, hence why banks have a system in place to help people acquire them within their affordability range, without having to file for bankruptcy afterward. These are our top tips on how to buy a house especially if you’re a first-time home buyer in South Africa: Getting prequalified means simply getting an idea of the price range you can afford, based on your net monthly income and credit score, using ooba’s free, online prequalification tool, the ooba Bond Indicator. Check your credit score. The attorney will draw up documents for the purchaser to sign, and send those documents to the Deeds Office, which will examine and approve the documents, normally within 8 to 10 working days. Carrying out investigations, including searches, into the property to ensure that it is appropriate for your needs. A zero deposit home loan is indeed possible, and in fact, “more than half of all the applications received by ooba home loans are from buyers who have no access to a deposit” according to Rhys Dyer, with three out of four of these applications being successful. Documents. You can apply to your bank for a home loan directly, or acquire the services of a home loan comparison service like ooba home loans. This prequalification is an indication of what you qualify for, based on what you input as your income and expenses, and your credit score. Once you have your requirements in mind, you can begin the house hunt. Then, if you need to raise your score, pay off any credit cards, make all of your credit payments on time, and resolve any credit disputes or delinquencies. Step 1: Document assembly. DIY with our online prequalification tool, or speak to an expert. © 2021 ooba (Pty) Ltd. All rights reserved. Once you have the report you can ask the necessary experts to quote on any essential repairs. Begin the search. Where are the shops, police and fire stations, medical centres, schools, and hospitals in relation to your new home? In South Africa, the Western Cape province continues to outperform all other areas, with Cape Town remaining the most lucrative city in the country. You’ll get a home that’s in line with the latest trends in design and construction, and it should be move-in ready. Neighbours and store owners in the area will also be a good source of information. The strength of its housing market and house price inflation, which has risen by over 10.35%, make the Mother City an attractive property investment destination for investors. If the home is under sectional title, ask the agent to provide you with up-to-date body corporate financial statements and check that the levies are not in arrears. The idea of buying a brand-new home can be tempting. Signing the contract you should obtain advice from a solicitor, as well as any other expert require... Obligated to buying a house in south africa process any known defects in their property for three years after the defects have been discovered issues... 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