DERICK FUNNELL PROPERTIES

So, you're in the market for a new home. It's an exciting step and there is nothing like a brand new space to call your own. Before your search begins we would like to ensure that your journey to home ownership is a smooth one. Here are some guidelines to help you every step of the way.

Step One: Know what you want

Do some house hunting homework first! Know what size suits your needs and give good consideration to your choice of area.  Think about accessibility to work, public transport, schooling and other amenities. Remember location really matters!

Step Two: Do your sums

Know exactly how much you can afford. It's not just the instalment you'll be paying - you need to include insurance (homeowners, household and life) and municipal costs in your budget. Use a Monthly Repayment Calculator to see how much you'll need on a monthly basis, to cover the bond. After that you need to add the additional costs to this figure.

Step Three: Banking on a budget

Now is the time to approach a Home Loans consultant or go online to do an affordability assessment to find out exactly how much credit you can access for your new home.

Step Four: Putting down a deposit

You may need to put some of your own money on the table before you can buy a house. Depending on your financial situation, some of the home loan products allow you to qualify for larger home loans without paying a deposit.

Step Five: The Right Package

Each bank has a wide range of financial products tailored to meet your individual requirements. It's important to choose a Home Loan package that works for you.

Step Six: Plan for additional costs

Be aware of other once-off costs that you will have to pay, over and above the deposit. These include initiation and administration fees, legal costs, bond registration fees and VAT/Transfer Duty.

Step Seven: Begin the search

There are a number of factors to consider when determining the initial amount to offer on a home:

Sale price of similar houses in the neighbourhood for the past year or so will give you a good estimate of current market value. The our estate agents will assist you with this information.

Mood of the market and the neighbourhood.  In a seller's market, the houses sell fast and sellers get close to the asking price.  In a slow market situation, or where the house has been in the market for a while, or when the seller needs to sell quickly, the responsibility to negotiate for a good price after the initial offer has been made lies in the buyers hands.

The general condition of the house is also an important pricing factor.  Information concerning things that need to be done in or around the building must be taken into consideration when making a price offer.

Step Eight: Know what you are buying

Make comparisons. Make a short list. Sleep over the short list. Do not guess or assume anything. Ask the estate agent as many questions as you can until you are totally satisfied.  Viewing the selected property several times will assist in final decision making.  It is your responsibility to ensure that a prospective home will not require excessive future maintenance.  You are allowed to question the reason for selling and the number of other sales taking place in the area.

Step Nine: I like it! I want it!

The decision has been made! It's now time to think about signing an offer to purchase with the agent and to complete your home loans application.

Make sure you have the following documents on hand:

• Proof of income
• Copy of your South African ID or passport
• Copy of offer to purchase
• Proof of current residential address (municipal account, Telkom account or valid TV licence).
• Salary earners: most recent salary slip or banking statement for the last 3 months, a letter from your employer which will be followed by a telephone confirmation to your employer.
• Last 3 months bank statement
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Once the bond originator / bank has received all the relevant documentation, the approval process begins.  The bank will need to do a valuation of the property being purchased to ensure that it is of value and that the bank is willing to finance it.  The home loan approval process can only be efficient if all the correct documents are provided.  The estate agent will assist you in completing an Offer to Purchase.  This makes the offer formal.  It includes an offer price, closing date and financing information.

Step Ten: Tracking your Home Loan

Once approved, the bank instructs the bond attorney to begin registering the bond.

The seller will advise the Transferring Attorney to transfer the property.  Title deeds and cancellation figures are requested from the bank currently holding the bond.  A rate clearance is requested from the local authorities/municipality.

The Bond Attorney contacts the transferring attorney and advises the amount available for guarantees.  They then request the draft transfer deed and guarantee requirements.

The cancellation attorney is requested to cancel the seller's bond on receipt of a guarantee for the outstanding amount.

Once the transfer attorney has received the title deed and cancellation figures, the buyer and the seller sign the transfer documents.  The buyer pays the transfers costs to the Transferring Attorney.

The Bond Attorney prepares the bond documents and the buyer signs these documents and pays the cost.

The Bond Attorney lodges the documents at the deeds office.

The deeds office receives the documentation and checks it before being registered.

This process can take about three months from the date of approval.

Step Eleven: Signing on the dotted line

Before a Home Loan is granted, your financial position and credit record will be checked. The bank will pay out the loan on the day of registration.

Once the legal documents are signed, the transfer fees paid and the seller of the property paid, the deed is done. You can thank your agent and congratulate yourself because you are now a proud owner of your new home!

Step Twelve: Living up to your responsibilities

Make your bond payments on time. It is vital that you do not miss a single monthly repayment, as the interest owing on the loan will increase and you'll end up paying more than necessary.  Debit orders are a good way of preventing late payments.  If you have trouble making payments, inform the bank as soon as possible.

Step Thirteen: Save thousand on your Home Loan

By boosting your monthly instalments, you can make huge savings on interest and pay off your Home Loan in double-quick time.

Step Fourteen: The big move!

Moving into your new home is an exciting experience, but it can also be overwhelming. Here are some tips to help you settle in faster.

• Change address with all relevant parties and specific authorities. You can get a 'Change of Address' form from the Post Office to make the necessary changes.
• Remember to sort out your utilities (water and lights) connections.
• Locate your nearest emergency services: closest hospital, local police station, etc and record their numbers.
• It's a good idea to meet your neighbours and find out about any initiatives in the area to combat crime, etc.
• In case of an emergency, make sure you know where to find the main shutoff valve for water, the fuse box and any other important switches.
• HOC and insurance cover will be in place from date of transfer or occupation.
• Always plan a budget for other expenses like maintenance and repair, service costs such as security alarm, gardening services and any other home emergencies
• Every building has a life cycle, which means your home will require major repairs at some point. Repairs must be expected and planned for. Set aside an emergency fund to deal with unexpected problems ranging from major repairs to illness and job loss.
• Live within your budget. Prepare a monthly budget and stick to it. You should monitor your spending every month and evaluate your progress in meeting your financial goals.
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(www.fnb.co.za)