The sooner you buy property, the better

According to Samuel Seeff, chairperson of the Seeff Property Group, buying your own house is the best decision you can make, and the sooner, the better. Property prices tend to rise annually, meaning the longer you wait, the more you will likely need to pay.

That said, buyers must be financially secure before signing on the dotted line, says Seeff. A house is a long-term investment, and selling a property takes time if you find yourself in financial difficulty.

Owning a home provides a foundation for financial security and personal stability, ensuring that monthly housing expenditures contribute toward a wealth-generating asset rather than paying off a landlord’s property.

Each monthly repayment helps build equity in your home until the bond is paid up in full. At the same time, market growth can increase its value, giving you a valuable asset. Paying extra into the bond can also shorten the repayment period.

You may eventually sell to move to a larger home or better neighbourhood, using the accumulated equity to reduce the next mortgage. You can also access the equity, but Seeff recommends only for financial emergencies, rather than lifestyle expenses.

First-time buyers require financial planning and a healthy credit record, ideally a score of 650 or higher. You can establish credit by opening a low-risk account, such as a store card or cell phone contract, and settling the balance fully every month.

As a general guideline, purchasing a home for R800,000 requires a gross monthly income of around R27,000, while a R1,200,000 property requires approximately R40,000. To qualify for a mortgage, banks evaluate income stability, existing debt obligations, and monthly living expenses to ensure affordability.

A permanent job with a three-month track record is typically the minimum requirement, with a higher threshold for self-employed applicants. Buyers can also pool income with a partner and purchase jointly.

Beyond the purchase price, buyers must budget for upfront transfer costs. These include bond registration and transfer costs, including transfer duty on any portion of the purchase price exceeding the R1.21m exemption threshold.

Buyers must also budget for housing costs such as municipal rates, taxes, sectional title levies, insurance, and maintenance. While 100% bonds (with costs in some instances) are generally available for first-time buyers, a deposit may also be required, usually for higher price properties.

The buying process begins with signing an Offer to Purchase, which becomes a binding deed of sale once accepted by the seller. This document usually includes suspensive conditions, such as securing a home loan. Conveyancing attorneys handle the legal transfer, which takes approximately three months, with occupation occurring after registration.

Throughout this transfer period, buyers must avoid taking on new debt or opening retail accounts, as banks perform a final credit check before registration and can withdraw the loan if your financial profile changes negatively.

Issued by Gina Meintjes