Thinking about buying property this year? With talk of interest rate cuts and low property price growth, 2024 is a good year to get into the property game.
Before you contact an estate agent to start viewing properties, make sure you are prepared and financially ready to take this big step by following these three tips:
Do your homework: Find out what type of buyer you are by answering these questions:
- Are you looking to build generational wealth through property?
- Are you hoping to capitalise on the buy-to-let boom?
- Do you simply want to find a home for your family to live in?
Then spend some time researching property prices online in the areas that interest you to get a good understanding of how much you are likely to spend.
Boost your credit score: Having a high credit score is key, as this plays a significant role in whether a bank will consider your home loan application, should you not want to go the cash purchase route. An acceptable credit score is one that is over 610, while an excellent credit score is over 781. Improve your score by not spending more than 30% of your credit limit, paying off store accounts and paying your bills in time and in full.
Set up a savings strategy: Getting your finances in check is a must before buying property. You need to work towards building up savings for:
Deposit: Putting down a deposit is one of the most effective ways to prove your affordability to both sellers and lenders, and results in a higher likelihood of an OTP being accepted, lower monthly repayments and a lower home loan interest rate from the banks.
Additional fees: You also need to budget minimum R100,000 to cover the additional costs of buying a home, which includes bond registration costs, transfer duty, conveyancing attorney fees, bank fees, moving costs and setting up utilities.
Those who are still struggling to reach their goal of owning their own home in 2024 may be able to take advantage of governmental resources, such as the First Home Finance Program (previously known as FLISP). This program gives young home buyers who are earning a gross household income between R3501 and R22,000 a month a subsidy to help finance their purchase and enter the property market.
For more property and financial advice, visit Buyers Trust.
