So you want to buy a house? That’s great! Buying a property can be one of the most satisfying things in life, but it can also be one of the most daunting. I’m sure you’ve heard a bunch of different myths about buying property, and maybe even had some reservations yourself. The truth is that there are plenty of ways to get your first home without breaking the bank or making big sacrifices. Whether you are looking for a cosy new apartment for just yourself or a stand alone home for you and your family, in this blog post we are going to help you bust some common myths and hopefully clear some things up and ease your mind regarding this exciting decision.
The short answer you can buy a house at any age.
Many people may believe that once you have spent all your youth working hard to make your dreams a reality, you may be too late to buy your dream house.
If you are a first home buyer and want to get into the market, it may be more difficult to secure a home loan if you are older than 65 years old, however, it is never too late to buy your first property. Even if your golden years are on the horizon and you don’t have a place to call your own home, you are not necessarily doomed.
According to the Head of product at Absa Home Loans, the average age of the first-time buyer in South Africa is 34 to 35 years but the decision to buy a home depends on an individual’s needs and what they can afford at a particular stage in their life.
Though it may be harder to be granted a bond after the age of 65, there is still an opportunity to lend to customers who are over 50. Ideally, a bank would want to ensure a client is not older than 75 when the bond is paid up. Retirement income and the ability to shorten the loan term would have to be considered before granting the loan.
If you qualify and have the means to pay your home loan in time, you can buy a new house at almost any age.
The decision to get a stand alone house or an apartment on the lifestyle you want to lead, it’s all about what you want. A house with a yard is always better for kids and pets, but if you’re living in an apartment and don’t have kids or pets (or plan on getting them) then this isn’t such a big deal.
Some people may believe that buying a stand alone house with a yard with the possibility to expand is always better than buying an apartment or a duplex. This is not always the case because the age and stage of life at which a person decides to buy a home will dictate the type of home they choose. A house with a yard may come at a higher cost but a buyer aged about 35 may look to buy with a future family in mind and, therefore, want a home that can be expanded and is close to good schools and parks. Another person may want a cosy and affordable 2 bedroom apartment that offers less maintenance, more convenience and security that offers them a lock up and go lifestyle.
Purchasing an apartment can also be a way of investing. Renting out a property can be a good way to bring in a regular income. The surge of new developments taking place throughout Cape Town and Johannesburg hint toward a bright future. “If you can find the right property and the right home loan, it is possible to make a rental yield of as much as 5 to 10%, depending on where you’re based,” says Rhys Dyer, CEO of ooba Home Loans, South Africa’s largest home loan comparison service.
So, if you’re in the market for a new place, consider all of these things before making a final decision. If you need help finding an apartment or home that’s right for you, then give us a call today! We’ll be happy to help find what works best for your needs.
According to the DebtBusters’ Q4 2022 Debt Index South African consumers are evidently under increasingly high levels of financial pressure meaning South Africans can buy 33% less with the money in their wallets now compared to six years ago.
According to the CEO of Debt Rescue Neil Roets, their latest survey results show that 40% of consumers say they have too much debt to cope with, and results show that 40% have impaired credit records.
The above may be true for many South African consumers but its not all doom and gloom, you can take charge of your finances and still make your home-owning dreams come true. If you are buying your first home, chances are you need a home loan. Having the right credit score is your first step toward securing the funds you need. A score of 610+ usually gives you a fair chance of home loan approval.
If you have checked your credit score and realise it’s too low to qualify for the best possible loan, there are some things you can do to boost it.
- Set reminders to pay the debt on time, every time. Or schedule any payments as debit orders if you can to make sure that they are paid on time.
- Pay off outstanding credit card balances in full each month. If you’ve built up unpaid debt on various credit cards, pay those off in full and close the cards so that you do not repeat
- the cycle.
- Don’t take on more debt than you can reasonably handle.
- If you have too much debt, consider debt consolidation.
- Try to avoid revolving debt, as it has high-interest rates and is more difficult to pay off.
- Make sure to check your credit score regularly and check that everything is correct.
In cases where you would like to buy a new apartment but need some time to bust your credit you can also explore the Rent-to-buy option.
If you are keen on buying a home in CentralBlue and need some expect advice our Agents are willing to assist and provide guidance to boost your credit score.
The majority of purchasers in today’s market are aware that location is important, but not everyone is aware of the factors that determine whether a place is a good location or not or how this affects purchasing decisions.
Schools are the one characteristic that has the biggest influence on property purchase decisions. Whether or not you have children, schools should factor into your decision-making process because they have such a significant impact on the prospective increase in value of the homes in the neighborhood. If there are good schools nearby then this increases demand for properties in those areas which drives up prices, if you are considering selling your home in the future being in a good school distric makes the property more attractive to buyers looking for somewhere safe for their family.
South Africa is a diverse country and some of the population is made up of expats. Some expats may be visiting on a short-term basis to taste the South African culture or for work purposes, and some may be very keen on staying long-term and placing their roots here or are completely immigrating.
Immigrants may be under the impression that they can’t buy property especially before they become citizens. In South Africa Foreigners are free to buy property without restrictions, subject to meeting the visa requirements to live and work in the country.
Nonresidents must transfer 50% of the purchase price or the balance of the purchase price via the Reserve Bank, from their own foreign bank to a designated account with a registered South African bank.
When purchasing property as a foreigner, it is important to partner with a team of experts you can trust to assist you settle in the country. Our team is well experienced in assisting foreign nationals purchase property in South Africa, contact our knowledgeable agents for more information.
If you’re thinking about buying a property, it’s important to know what the process entails and what you can expect. While there are many myths about buying property, we hope this article has helped debunk some of them for you!