Explaining the Home Loan Process to First-Time Buyers
So, you’ve found the perfect buyer for one of your properties – congratulations! Here are three tips to share with them so that the home loan process is as straightforward as possible.
Is the house a good investment?
Explain to your buyer that the future value of a house can be determined, in large part, by its location. Houses that are located in areas with day-to-day amenities such as shopping malls, good roads, schools and hospitals will increase in value, while houses located in remote areas with no amenities in close proximity may depreciate in value
1. Make an informed decision
The first and most important step is deciding exactly what you can afford. Talk directly to your bank about this and bear in mind that most home loans are paid back over a period of 20 to 30 years, so you need to consider your ability to repay the loan over an extended period.
2. Plan Ahead
Having some money saved up for a deposit is enormously useful as it can help to cover other costs associated with buying a house, such as transfer duties (where applicable) and attorney fees.
3. Think of the Future
Choosing the right banking partner can make all the difference when deciding whom to make this long-term financial commitment with. In the next 20 to 30 years it is likely that changing economic circumstances, such as rising interest rates, fuel price hikes, electricity tariff increases and inflation, could affect how much you can afford to pay back. Make sure you’ve chosen a flexible home loan solution that is tailored to your individual needs.
Need more information?
Nedbank has a free, step-by-step video and booklet that empowers first-time homebuyers or anyone else who is considering purchasing a new house. The guide is available to Nedbank and non-Nedbank clients, at no cost, on the Nedbank Home Loans website. For more information, visit nedbank.co.za/homeloans and click on the “Home Buyer’s Guide” link.