With interest rates at an all-time low, you might be wondering: is now the time to buy property? Perhaps. As with everything in life, it’s important not to rush into making a decision. You need to spend time considering your options.
“The current low interest rate environment has many people who previously could not afford a property entering the market for the first time,” says financial journalist Maya Fisher-French. “It certainly offers new opportunities, so make sure you’re financially ready for it. Keep in mind that interest rate will rise at some point again and then you should still be able to afford your loan.”
If you wonder if you should rather keep on renting, weigh up the pros and cons for your situation over the longer term. Renting can be more affordable in the short term, so if you’re after a short-term solution, it pays to rent rather than putting down (expensive) roots as a homeowner.
Nicolette Mashile, better known as the Financial Fitness Bunny, explains that on the other hand, homeownership does make sense over time. “As rentals increase each year, they eventually match what you’d pay for your bond. At that point, the cost argument disappears and it makes more financial sense to get into the property market.”
To ensure you can afford your dream home, you should factor in various costs aside from the purchase price.
“You have to budget for quite a few additional costs, such as the transfer duties, bank fees, bond costs, municipal utilities and, don’t forget, homeowner’s insurance too,” says Fisher-French.
Allow for these expenses in your budget:
Also keep in mind there are running costs involved when owning property. “It’s not just your bond payment; you’ll have lots of other bills like electricity, water, rates, insurance and maintenance to cover,” says Fisher-French.
She recommends that before buying property, you should try to put the money aside to cover ongoing costs such as the above. “See if you can save that amount each month. If you can live on that budget, you know you can really afford it. Plus, you can use the money you saved for a deposit or to cover other costs, such as moving or transfer fees.”
You can apply for a home loan at Capitec of up to R5 million over 30 years (depending on your affordability and credit profile) making that dream home a reality.
Applications can be done from anywhere, anytime on Capitec’s online home loan portal. There are 4 straightforward steps to follow, which can be completed in less than 5 minutes. Visit the portal here.
After an application is underway, you can track it in real-time on the home loan portal. Simplified into 6 steps, the portal shows exactly where you are in the process, what the next step is and if anything more is needed from you.
Along with the portal, you’ll also be assigned a home loans consultant, who is available to help you if you have questions or need assistance at any stage.
Make your family’s dream home a reality with a Capitec home loan. Apply online today.
