Home Loans In South Africa
Move away form all stressfulness and mishaps that most homeowners go through when buying a home by learning options and fees for home loans.
First-time buyer home loans: A loan in which borrowers finance more than the full value of the property, the intention being that they cover part of the loan’s cost with the loan itself. Along with a lack of deposit requirement, this eases the burden on new buyers and allows them to realistically enter the market.
Fixed home loans: Buyers who chose this type of home loan will have a fixed interest rate - usually for a period of one to two years. Normally, the interest rate for a fixed loan is slightly higher than the current prime lending rate. This loan protects homeowners from rising interest rates and keeps your repayments the same during the fixed-rate period. But, if rates decline, your rate and payment will not adjust.
Variable home loans: This type of loan begins with one interest rate, agreed upon between you and your lender. Then, if the prime interest rate increases or decreases, the interest rate on your loan will adjust accordingly. Obviously, this option is best in a declining interest rate environment.
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.
The cost that a person needs to pay for getting a home loan is as important as the home loan and it should be considered when one enter the market. But for most buyers who are not familiar about this, will ended up in a surprise.
A minimum deposit amount should be paid to the lender if you are not a first-time buyer to apply for a home loan. The deposit amount is generally 20%, but it can also vary depending on the value of the property for which you are applying a home loan.
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.
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