By Katlego Mei, CFP ®

Purchasing a home is an exciting milestone, but it can also feel overwhelming. To help you navigate this journey, let’s break down key factors to consider, both financially and beyond.

The Budget

Start by determining how much you can realistically afford. Review your income, expenses, and any existing debts. Remember to factor in additional costs that will come with owning a property, such as property rates and taxes, insurance, and potential levies (especially if you’re considering a complex or sectional title property).

Save for a Deposit and Transfer Costs

While you may qualify for a 100% bond, it’s advisable to have a deposit ready. This deposit reduces the amount you need to borrow from the bank, ultimately lowering the interest you will pay over the term of your loan. Additionally, acquiring a property involves costs such as bond registration fees, transfer costs, and transfer duty. You will need to pay these costs before the property is officially transferred into your name. The total amount will depend on the purchase price, so it’s best to save money in advance to avoid relying on debt for these expenses.

Check Your Credit Score and Get Pre-Approved

A healthy credit score can help you secure better mortgage rates. Before applying for a home loan, it’s wise to pay down debts and refrain from applying for new credit. A mortgage pre-approval provides insight into how much you can borrow and makes you a more attractive buyer in a competitive market. This pre-approval not only clarifies your budget but also streamlines your home search, preventing disappointment from falling in love with properties outside your price range. Working with a bond originator to compare interest rates from multiple lenders can save you a significant amount of money over the life of your home loan.

Non-Financial Factors: The “Lifestyle” Checklist

Location, Location, Location

Consider how close the property is to your work, schools, shops, and public transport. Test the commute during rush hour—you likely don’t want to spend half your day in traffic. Take the time to explore the neighbourhood. Are there parks, cafes, or community events? Spend a weekend or a few days getting a feel for the area. Try local restaurants, walk through the streets, and see if it feels like home.

Space and Layout

Think about your current and future needs. Will you require an extra bedroom, a home office, or a backyard for pets and children? Assess the layout. Is the kitchen open? Are the bedrooms cozy? Is there sufficient storage space?

Property Condition

Never skip the home inspection! Look for potential issues with the roof, plumbing, wiring, and signs of dampness or mould. Check the windows, doors, and insulation. Energy efficiency can save you money and keep you comfortable year-round.

In conclusion, buying a home is not just about finances; it’s also about finding a place that feels right for you to build your life and create lasting memories. Failing to plan properly and making a poor purchase can lead to significant financial strain from overpaying, unexpected repair costs, or higher-than-anticipated ongoing expenses such as taxes and insurance. Poor planning might leave you stuck in a home that doesn’t suit your lifestyle, resulting in regret and the costly hassle of selling and moving again.

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