Buying your first home

TIPS: HOW TO AVOID THESE COMMON PITFALLS AS A FIRST-TIME BUYER

- Eric Jordaan

Navigating the property market as a first-time homebuyer can be daunting, and the fear of making a costly mistake adds significant stress.

This article explores the most common errors made by first-time buyers, offering valuable insights and practical advice to help you avoid these pitfalls.

Understand your affordability

Before you begin your house-hunting journey, it's crucial to determine what you can realistically afford regarding bond repayments. Neglecting to do this may lead to disappointment when applying for a home loan. Numerous online home loan affordability calculators can provide a realistic estimate of the financing you might qualify for.

As a general guideline, your home loan repayment should not exceed 30% of your gross monthly income or combined gross income if you are purchasing as a couple, and it should not surpass your net surplus income.

Have a pre-approved bond

A highly effective method for assessing your affordability and strengthening your negotiating position is obtaining a pre-approved bond through your bank or a bond originator. Home loan pre-approval involves a pre-qualification process that includes a credit score check to determine the size of the loan you are likely to qualify for. Upon completion, you will receive a pre-qualification certificate, which serves as evidence of your serious intent as a buyer and can be presented to your estate agent.

Use a bond originator

While applying for a home loan directly through your bank is an option, consider the significant advantages of working with a bond originator. Unlike banks, which prioritize their own interests, a bond originator focuses on securing the best deal for you. They will assist you in preparing a single application that can be submitted to multiple banks simultaneously.