Lake Properties Lake Properties
Here’s a more detailed breakdown of how to transition from tenant to homeowner in South Africa, with practical advice, tools, and options specifically designed for the South African housing market.
🧭 1. Assess Your Financial Position
✅ Check Your Credit Score
Your credit score affects your ability to get a home loan and what interest rate you’ll be charged. You can check your score for free with:
- TransUnion: www.transunion.co.za
- Experian: www.experian.co.za
- ClearScore: www.clearscore.com/za
A score above 600 is generally considered good, but above 700 improves your chances of approval with better terms.
💰 2. Budgeting and Saving
🧾 Know What You Can Afford
Use a home loan calculator to estimate:
- The bond you can afford based on your income.
- Monthly repayments at different interest rates.
👉 Use tools like:
📦 Costs to Save For
- Deposit: 0–20% of property price (some banks offer 100% bonds to first-time buyers).
- Transfer duty:
- R0 on homes under R1.1 million.
- Scales upward beyond R1.1 million.
- Attorney fees: Legal and registration costs.
- Bond registration fees: Paid to the bond attorney.
- Monthly costs post-purchase: Rates, levies, insurance, maintenance.
🧾 3. Get Prequalified for a Bond (Home Loan)
Before looking at properties, get prequalified to:
- Know your budget.
- Improve your negotiating power with sellers.
You can do this via:
- A mortgage originator like Ooba, BetterBond, or Banks directly (e.g., Absa, FNB, Nedbank, Standard Bank).
- They’ll review your salary, expenses, credit score, and current debts.
🏡 4. House-Hunting Tips
🔍 Where to Search
- Property24
- Private Property
- MyProperty
- Use location filters, school proximity, and crime stats.
🗺️ What to Consider
- Safe and stable areas.
- Access to public transport.
- School zones (affects value).
- Freehold vs Sectional Title:
- Freehold = full ownership, more responsibility.
- Sectional Title = apartments/complexes, levies apply but shared maintenance.
📝 5. Make an Offer to Purchase (OTP)
When you find a home:
- Sign an Offer to Purchase – a legally binding agreement with the seller.
- Include conditions such as:
- Subject to bond approval.
- Subject to sale of your current property (if applicable).
A real estate agent or conveyancer can help ensure the OTP protects your interests.
🏦 6. Home Loan Application
After signing the OTP:
- Submit it to the bank or bond originator for formal bond application.
- They’ll request:
- Latest payslips.
- Bank statements (3–6 months).
- Proof of residence.
- ID copy.
If approved:
- You’ll receive a Loan Approval in Principle or formal bond grant.
- Choose the best offer from multiple banks (use a bond originator for this).
🏛️ 7. Legal & Transfer Process
There are three attorneys typically involved:
- Transferring attorney – Registers the property in your name.
- Bond attorney – Registers the bond with the Deeds Office.
- Cancellation attorney – Cancels the seller’s existing bond.
Timeline:
- Takes 6–12 weeks depending on the bank and Deeds Office.
💸 8. Final Payments & Registration
Before the property is registered:
- You must pay:
- Transfer duty (if applicable)
- Attorney fees
- Bond registration fees
- After registration, you receive:
- Title deed in your name.
- Monthly bond repayment begins.
📈 9. Government Assistance: FLISP Subsidy
✅ What is FLISP?
Finance Linked Individual Subsidy Programme: Helps first-time homebuyers earning between R3,501 – R22,000/month.
How it works:
- You apply after getting bond approval.
- You can receive a once-off subsidy from R30,000 to R130,000 (depending on income).
- Can be used to reduce bond amount or cover costs.
Apply through:
- NHFC website
- Or via your bank/bond originator.
📌 Summary Checklist: From Tenant to Owner
| Step | Action |
|---|---|
| 1 | Check credit score |
| 2 | Save for deposit & fees |
| 3 | Get prequalified |
| 4 | Search for property |
| 5 | Sign OTP |
| 6 | Apply for bond |
| 7 | Complete legal transfer |
| 8 | Move in! 🎉 |
| 9 | Apply for FLISP (if eligible) |
No comments:
Post a Comment