5 ways to enter the residential property market
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Loading... - Mike Kuate
- 22 Aug 2022
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According to Carl Coetzee, CEO of BetterBond, the residential property market is still seeing considerable interest from first-time buyers following two years of comparatively low interest rates.
“What is encouraging is that there has been an almost 8% increase in the number of formal grants to first-time buyers for the past 12-month period (year-on-year for April), and an increase of just over 7% in the approved bond size for these buyers,” he says.
Coetzee unpacks five ways first-time buyers can enter the property market.
1. Affordability is always important when buying a home. While you need to know what you can afford to pay each month on a bond, you have to also be prepared for the upfront costs associated with buying a home. These include transfer duty, transfer costs (lawyer’s fees), bond registration costs and other expenses. Once you are a proud homeowner, you will also have to pay utility costs and for regular repair and maintenance.
“It’s, therefore, advisable to obtain pre-approval from a bond originator so that you have a clear idea of what you can afford. Pre-approval also improves your chances of securing a bond,” says Coetzee. “The seller will also see that you are a serious buyer who has already done the paperwork and credit checks,” adds Coetzee.
2. Although the repo rate is gradually starting to climb again, and the prime lending rate is now at 7.75%, a bond originator will apply to more than one bank on your behalf to secure a lower interest rate - called a rate concession. Currently BetterBond’s average interest rate concession when applying to four banks is 0.61%, says Coetzee. This means that the difference between the highest and lowest offer you receive from the four banks is 0.61%. Read More...
