Make no mistake, purchasing the home of your dreams is no easy task. A lot of research needs to be done in order to find a home that is going to cater to your every need. After all, a home is usually a lifelong investment and not a decision to take lightly.
In this article we are going to explain the process of buying a house from beginning to end. Knowing what to expect when you decide to purchase a home is extremely beneficial and can help to alleviate yourself of any unwanted headaches.
Where to Start
Reconcile Your Current Financial Status
Buying a home is not a cheap affair and most people need to take out a mortgage in order to buy a home. A bank can offer this facility, but it is not just going to hand you over hundreds of thousands of dollars without the certainty that they are going to get their money back.
The bank will go over your finances thoroughly before offering to give you a mortgage. Before the bank does this it is a good idea to get a handle on your financial status before the bank does.
You are going to need a steady job with a passive income in order to qualify for a home loan and the bank will check this by asking for your bank statements to make sure for themselves that you have a steady monthly income.
The bank will also check your credit scores and credit reports in order to ascertain what type of mortgage you qualify for. You can beat them to this and do it yourself by using a credit reporting agency.
Another thing to do is to look at how much cash you have on hand to put a down payment on the home that you would like to buy. Some banks may ask for up to 20% down payment before you are able to get secure a home-loan.
Set A Budget and Stick to It
If you can only afford a home that costs R 1 200,000 it makes no sense to look for houses that cost R3 000,000 and higher. By narrowing your price range, you can set up a budget and stick to it. In order to budget for a house, make a list of your monthly expenses such as car payments, credit cards, school fees and other expenses.
The Next Step
Get Your Bond Pre-Approval
Contacting banks before you shop for a house can help you to get a feel for the types of bond you would qualify for as well as what terms, conditions and interest rates would apply to your specific circumstances.
By liaising with a lender before you decide to purchase a home you will be able to get an idea of where you can obtain the best rates as well as find a lender that you are comfortable to do business with.
Although a bond pre-approval is not necessary when you want to shop for a home it will make the process a lot easier once you have chosen the home that you want to finance.
It is important to remember that a pre-approval is not a guarantee that you are going to get a loan but rather a statement showing that you are qualified to received one officially.
The pre-approval will also indicate the maximum loan amount which will assist with your budget as well as help you to make a list of houses to choose from. Make it a priority to find the best lender for your needs and also do a lot of shopping around to get the best deal.
Find the Best Real Estate Agent Available
There is no problem with looking at houses online and getting a feel for what type of home would best suit you but it is extremely beneficial to find a reputable Real Estate Agent when you decide to get serious, especially if you are a first time home buyer with little or no experience in the real estate market.
The Fun Part
Looking at Houses
It is important to be realistic and do not act out on a whim. If you are not comfortable with a few aspects of the house that you are looking at then don’t make an offer unless you have the funds and energy to alter the parts of the house that you are not happy with.
There are plenty of homes to choose from so try not to be too hasty unless of course, you know that you have found your dream house. Make a list of what you are looking for in a new home and give it to your Real Estate Agent so that they will have a better idea of what you are ideally looking for.
The Not So Fun Part
Get Your Documentation Ready
Your lender is going to require a lot of documentation once you have decided on the house that you want to purchase and the sooner you gather this documentation the better. The lender will ask you to supply the following documentation:
- Two years of tax returns
- Pay slips for the past two months
- Bank statement and any investment account statements
- Proof of funds to make a down payment
- Identity document
This is the basic documentation that the lender will require but it is quite possible that they could ask for more documentation as well.
The Final Stages
Negotiate an Offer
Your Real Estate Agent will advise you on how to make an offer on the house that you want to purchase. They have an excellent feel for the market and will be able to advise you on what offer you should make on the home that you want to purchase. They are also able to advise you on any other offers that may be pending on the house which will assist you to determine if you need to make a higher offer.
Don’t be afraid to attach conditions to your offer such as a closing date, inclusion of appliances and furnishings, repairs that may be needed or a clause that specifies that your purchase is subject to the sale of your current home.
Once your offer has been approved it is time to contact your lender and start with the mortgage application. You will no doubt have many back and forth dealings with the loan officer and questions may be asked as they go through your financials in more detail.
The final approval often comes within a few days of the closing date so try not to panic. The lender is within their rights to make sure that you are not going to be a risk and that you are going to be able to pay back your loan.
The home that you want to purchase will be subject to a house inspection and no contract will be signed without a clause saying that the house has passed an inspection.
This helps the buyer to make sure that there are no structural or functional problems with the house which will are then listed on the contract.
The inspector will advise you about any problems that they may find with the house and it is essentially up to you to decide if their findings are strong enough for you to back out of the deal, demand repairs from the seller before the deal closes, or agree to purchase the house “as is” if the problems are only minor and you feel that you can repair them yourself.
The Finish Line
Closing the Deal
You have nearly reached the finish line and all that is left to do is to sign a lot of paperwork before receiving the keys to your new home. You will be experiencing a lot of anxiety and excitement during the final stage as you start to realise the magnitude of the commitment that you are making.
Find A Good Moving Company
Moving day has finally arrived, and it is time to move into your new home. While this may be a tedious and grueling task. you can choose to move with the help of family and friends. Alternatively, you can use a moving company in South Africa that you feel you can trust.
BW movers are committed to give you the best moving experience at affordable prices. We understand what stresses moving can put on the entire family and endeavor to make your moving experience as pleasant and enjoyable as possible.
Our handpicked team of packers and movers are trained to make the moving process smoother, faster and stress free.
BW Mover company will pack, carry, transport and offload your belongings while exceeding industry standards with our friendliness and professionalism. Put BW Movers to the test and experience a move that makes you smile.
We Are the Moving Expertise You Can Rely On.
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