Purchasing your first home is an exciting time in your life; however it can be a complex process that requires a lot of research.
Albertus Van Staden, Head of Credit at FNB Housing Finance explains some of the most common mistakes first time home buyers tend to make.
Affordability will often throw a first time home buyer off because it is not a simple calculation.
“Often first time buyers are overly optimistic about their affordability,” says Van Staden. “Merely taking your income into account is not an accurate assessment of your affordability, as there are expenses that will have to be maintained along with your bond repayments.”
Before starting to look for a home, potential home owners should get an indication of what loan they qualify for.
Financial institutions can often pre-qualify customers. FNB’s own online tool www.fnbpropertyleader.co.za will assess and perform a credit check, giving buyers a pre-authorised amount to enable them to know how much they can buy for.
“Don’t be disappointed if the amount you qualify for is less then you thought, this is to ensure that you can comfortably afford a home loan and avoid getting into financial difficulty later in life,” says Van Staden.
Owning a home means extra expenses
The bond is not the only expense that comes with owning a house.
“Once you have successfully bought your house, you will need to be pragmatic about doing things like furnishing your home. It is not wise to take out credit to furnish your new home. You will