Home Loans In South Africa: A Beginners Guide

You want a home loan and would like to get started. But what do you look for, what do you need and how do you get started. Getting home loans in South Africa is now easier than every before.

Home Loans In South Africa: Getting Started

A step by step guide that explains exactly what you need and what to do in just 14, very easy to follow steps. Once you’ve completed all 14 steps, not only will you know where to find the best home loans in South Africa, but have an affordable home loan as well.

So let’s get started:

  1. Buying a Home

You’re ready to buy a new home and it’s very exciting, and the thought of having a space to call your own is thrilling. But before you can just buy what you  like, the most important step is to know what you want. So it’s best to do some house hunting homework first ,for an example location matters ,also see if the house suits your needs, take a look at the area, will it be accessible to work, public transport if needed, schooling and other activities.

  1. Do your math

Know what you can afford. You won’t just pay the installment, you will also need Homeowners, household, and life insurance.

  1. Banking on a budget

The best advice we can give you here, contact a home loan provider expert to find out exactly what’s what. You can do that right here. FNB Home Loan

  1. The deposit

You’ll need some of your money to get started, depending on your financial situation, some home loan providers will allow you to qualify for larger home loans without paying a deposit. But when it comes to home loans in South Africa, it’s always better to check first.

  1. The right package

Always choose a package that suits your individual requirements. A home loan package that works for you.

  1. Additional cost planning

Costs like initiation and admin fees, legal costs, bond registration fees and VAT/Transfer Duty.

  1. Start the search

  • There are some things to consider when calculating the amount to offer on a home:
  • The sales price of houses in the area for the past year should give an estimate of current market value. The estate agent will help with this.
  • The mood of the market in the area. In a seller’s market, sales go quick and sellers get close to their asking price. Slow market or if the house has been on the market for a while, it’s the buyer’s job to negotiate a price after an offer has been made.
  • The condition of the house is also an important factor in price. Info concerning things that need to be done in and around the house must be taken into consideration when making an offer.
  1. Know what you’re buying

View as many homes as possible, compare, make a short list, sleep over the shortlist, never guess or assume anything. Ask questions till you’re satisfied. Viewing  the property a few times will help in making the final decision. It’s your job to make sure the house won’t need excessive future maintenance. You’re allowed to ask for the reason of  why the house is been sold and the number of other house sales taking place in the area.

  1. You Like it! You Want it!

You’ve made a decision; it’s time to sign an offer to buy with the seller and complete your home loan application.

Documents you will  need:

  • Proof of income
  • A South African bar-coded or Smart Card identification
  • An offer to purchase
  • Proof of current residential address (municipal account, Telkom account or valid TV license).
  • Salary earners: most recent salary slip or banking statement for the last three months, a letter from your employer which will be followed by a telephone confirmation to your employer.

Once the loan provider received all the documentation, the process begins. The bank will then do a validation process, just to make sure the house has value and that they’re willing to finance it. After all the right documentation has been provided, approval begins. The estate agent will help you in completing an offer to purchase. This makes the offer, formal.

  1. Tracking your new home loan

  • Once approved, the bank instructs the bond attorney to begin registration.
  • The seller will tell the Transferring Attorney to transfer the property. Title deeds and cancellation figures are requested from the bank holding the bond. A rate clearance is requested from the local authorities/municipality.
  • The Bond Attorney contacts the transferring attorney and discusses the amount available for guarantees. Then request the draft transfer deed and guarantee requirements.
  • The cancellation attorney is asked to cancel the seller’s bond on receipt of a guarantee for the outstanding amount.
  • Once the title deed and cancellation figures have been received, the buyer and the seller sign the transfer documents. The buyer pays the transfers costs to the Transferring Attorney.
  • The Bond Attorney prepares the bond documents and the buyer signs these documents and pays the cost.
  • The Bond Attorney lodges the documents at the deeds office.
  • The deeds office receives the documentation and checks it before being registered.

This process can take about three months from the date of approval. So be prepared.

  1. Sign the dotted line

  • Before a Home Loan is granted, your financial position and credit record will be checked. The bank will pay out the loan on the day of registration.
  • Once the legal documents are signed, and the transfer fees and the seller of the property had been paid, you’re done.
  1. Your responsibilities

Make sure you pay your bond on time. So remember to make the payment every month. Or else the interest will increase, and you’ll end up paying more.

  1. Save, save, save!

By paying extra every month, you can save yourself years by paying off your home loan very quickly.

  1. Moving!

Simple tips for moving.

  • Change address with all relevant parties and specific authorities.
  • You can get a Change of Address’ form from the Post Office to make the changes.
  • Remember to sort out your water and lights connections.
  • Locate your nearest emergency services: closest hospital, local police station, etc. and record their numbers.
  • It’s a good idea to meet your neighbors and find out about any initiatives in the area to combat crime and so on.
  • In the case of an emergency, make sure you know where to find the main shutoff valve for water, the fuse box, and any other important switches.
  • HOC and insurance cover will be in place from the date of transfer or occupation.
  • Always plan a budget for other expenses like maintenance and repairs, service costs such as security alarm, gardening services, and any other home emergencies.
  • Every building has a life cycle, which means your home will require repairs at some point. Repairs must be expected and planned for. Set aside an emergency fund to deal with unexpected problems ranging from major repairs to illness and job loss.
  • Live within your budget. Prepare a monthly budget and stick to it. You should monitor your spending every month and evaluate your progress in meeting your financial goals. This is the best advice we can give anyone.

And there you have it, quick and simple. For any questions, please leave a comment, we’d love to hear from you.


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Home Loans In South Africa: A Beginners Guide
You want a home loan and would like to get started. But what do you look for, what do you need and how do you get started. Getting home loans in South Africa is now easier than every before.
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