5-Steps to Home Buying Success
Category Buyers Guides
The time has finally arrived for you buy a home and understandably, you might be feeling a bit overwhelmed and just a little ill-equipped to handle the buying process ahead of you. To help you during this important chapter, the following 5-step guide will help you secure a home loan, as well as uncover and claim your dream home.
Step 1: Place Priority on your Credit Report and Score
South Africans are entitled to one free credit report from every credit bureau each year. Unfortunately fewer than 5 percent make use of this, and as a result, lose out on a host of benefits. Checking and understanding your credit report and score before speaking to a lender will allow you to dispute any errors in the report which may affect your score, that can, in turn, prevent you from securing a home loan. A good or high credit score means that you are a low-risk borrower and therefore, likely to secure finance on a home, whilst the opposite is true for a low credit score.
Hint: Go to www.transunion.co.za/assistance/free-credit-report to claim your free credit report.
Step 2: Get Pre-Approved
Once you have checked your credit report and score, the next step is to get a pre-approved loan as this will assist in accelerating the process of buying your home. A pre-approved loan is the best way to show future sellers that you can afford a home you intend to buy. This ideally should take place during the initial stages of your home search journey and once you choose a preferred licensed lender you can go ahead with the pre-approval.
The process requires essential information and documents, including three to six-month payslips or bank statements, a credit check to determine the number of credit inquiries and credit accounts in your name, as well as your blacklist status. Obtaining a pre-approved home loan will be based on your credit scores and your ability to pay off monthly installments. It is important to keep in mind that a home loan is not guaranteed through pre-approval, but this does indicate to the seller that you have the financial stability to be approved for a loan large enough to purchase their home.
Hint: Go to www.betterlife.co.za/home-loans/get-pre-qualified to get a pre-approved home loan.
Step 3: Find a Trusted Real Estate Agent
The real estate agent you choose will help you through the entire home buying experience, therefore it is important to choose the one you can trust, with the right expertise. The ideal agent will provide you with a wealth of information, including the current market conditions, financing options and assist with negotiations. Ultimately, this person will keep you updated and hold your hand through the entire transaction, while ensuring that your home buying experience is as successful and stress-free as possible.
After taking the time to understand what you are looking for in a home, the agent will find a list of properties that suit your price range, size, and location. During this time, it is integral that you look at listings online with your agent to get a better understanding of your requirements. Once you find a home that you’re interested in, your agent will then guide you towards making an attractive offer after taking market conditions into consideration. After you’ve submitted your offer, you will then have to wait for the seller to either agree with the price, simply reject it or counteroffer it.
Step 4: Get insured
Once you have found your dream home, both you and the seller have agreed on a selling price and a home loan has been approved, it is time to get it insured. All financial lenders require a homeowners insurance, so ensure that you speak to a trusted insurance agent who will assist you in taking out an insurance policy to protect your investment. For those who already have a homeowner's insurance, the process is fast-tracked as all you need to do is phone your insurance provider and inform them that you are buying a new home. They will handle writing a new policy.
Hint: Go to www.brokersure.co.za to find a trusted broker to insure your new home.
Step 5: Sign Papers and Await Transfer
Attention to detail is key when signing the necessary sale papers to move into your new home. Ensure that you read these carefully and more than once before signing. The sheer amount of paperwork that you need to read through and sign can be draining, however, the good news is that at this stage, the buying process is almost complete.
After signing, the property then needs to be transferred from the previous owner onto your name. This usually takes on average, three months from the date of sale. However, your sale contract will specify exactly when you can move in.
Whether you are a first-time homebuyer or experienced, the process is always going to be daunting. However, by staying ahead of the game, equipping yourself with the right knowledge and finding a trusted real estate agent will ensure a successful home buying experience.
Author: Shelley Residential