Africa Melane speaks with Andrea Tucker of Mortgage Me.
Is buying your first home on your goals list for 2023?
With South Africa’s interest rate hikes and the soaring cost of living, you may have to think very carefully before you take this step.
Buying your first property is a big decision and can be exciting yet scary at the same time.
The process may seem overwhelming, but it doesn’t have to be if you stick to a few basic home-buying tips.
Run the numbers. We aren’t at the end of the increasing interest rate cycle. Most economists believe there will be more interest rate hikes. What that means is that South Africans looking at buying property need to do calculations to anticipate what a home loan installment will cost them now, in March as well as what it could be with another two or three interest rate hikes.
Andrea Tucker, Mortgage Me director
Depending on how big your home loan is, your installment will cost you a significantly larger amount than it is on the day that you signed up for a home loan. You need to anticipate how much it will cost you in December and make sure you have some fat in your budget or look at how much of your expenses you can curtail to afford that increased installment amount.
Andrea Tucker, Mortgage Me director
Potential homebuyers are urged to put down a deposit of 10% to 15% percent on a home loan.
Banks are able to create a better credit profile for the client and the bigger the deposit, the more favourable the home loan application.
We recommend now that people rather hold off if they only have a 10% deposit. Save like crazy to put down a 20% deposit. This will be a safety net that’s going to soften any interest rate hikes because you’re borrowing less.
Andrea Tucker, Mortgage Me director
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