Home Loans In South Africa
Move away form all stressfulness and mishaps that most homeowners go through when buying a home by learning options and fees for home loans.
First-time buyer home loans: Designed for people who have never financed the purchase of property before, this option allows qualified borrowers to finance more than 100% of the property value. The goal is to make it easier for new buyers to enter the market by wrapping some of the costs of a loan into the loan amount. In addition, there is no deposit requirement for first-time buyer home loans.
Fixed home loans: Buyers who chose this type of home loan will have a fixed interest rate - usually for a period of one to two years. Normally, the interest rate for a fixed loan is slightly higher than the current prime lending rate. This loan protects homeowners from rising interest rates and keeps your repayments the same during the fixed-rate period. But, if rates decline, your rate and payment will not adjust.
Variable home loans: This type of loan begins with one interest rate, agreed upon between you and your lender. Then, if the prime interest rate increases or decreases, the interest rate on your loan will adjust accordingly. Obviously, this option is best in a declining interest rate environment.
Capped home loans: Buyers will only be able to receive the benefits of both the variable and fixed home loans, who meet the required qualification. Use this option caps to negotiate rate for a fixed period of time. you can also take advantage of decreasing interest rates which also safeguards you against raising interest rates. confirm if you can avail this option from your bank.
The cost that a person needs to pay for getting a home loan is as important as the home loan and it should be considered when one enter the market. But for most buyers who are not familiar about this, will ended up in a surprise.
A minimum deposit amount should be paid to the lender if you are not a first-time buyer to apply for a home loan. The deposit amount is generally 20%, but it can also vary depending on the value of the property for which you are applying a home loan.
Registration and transfer fees: Can be also called conveyancing fees. These types of fees go toward attorneys that register the real estate in your personal name and those inclcuded in the mortgage of your property. Fees are assessed by the Law Society and strive on a sliding scale. The more the purchase fees, the higher the fee.
Deeds office levies and fees: The Deeds office is responsible for the registration of ownership and other rights regarding immovable property. This is a government office under the jurisdiction of the Department of Land Affairs.
Rates and taxes: Before property can be transferred to your name, the rates due on the property must be paid in full for the financial year. As a buyer you will be responsible for a pro rated amount for the part of the year you will occupy the property. You will also be charged for a rates clearance fee certificate.
Some of the most important that has to be considered while owning a home are the cost of the property and the life insurance which adds up to the overall costs. Also the moving costs, water, electrical and the household costs should be calculated for budgeting.
First-time buyer home loans: Designed for people who have never financed the purchase of property before, this option allows qualified borrowers to finance more than 100% of the property value. The goal is to make it easier for new buyers to enter the market by wrapping some of the costs of a loan into the loan amount. In addition, there is no deposit requirement for first-time buyer home loans.
Fixed home loans: Buyers who chose this type of home loan will have a fixed interest rate - usually for a period of one to two years. Normally, the interest rate for a fixed loan is slightly higher than the current prime lending rate. This loan protects homeowners from rising interest rates and keeps your repayments the same during the fixed-rate period. But, if rates decline, your rate and payment will not adjust.
Variable home loans: This type of loan begins with one interest rate, agreed upon between you and your lender. Then, if the prime interest rate increases or decreases, the interest rate on your loan will adjust accordingly. Obviously, this option is best in a declining interest rate environment.
Capped home loans: Buyers will only be able to receive the benefits of both the variable and fixed home loans, who meet the required qualification. Use this option caps to negotiate rate for a fixed period of time. you can also take advantage of decreasing interest rates which also safeguards you against raising interest rates. confirm if you can avail this option from your bank.
The cost that a person needs to pay for getting a home loan is as important as the home loan and it should be considered when one enter the market. But for most buyers who are not familiar about this, will ended up in a surprise.
A minimum deposit amount should be paid to the lender if you are not a first-time buyer to apply for a home loan. The deposit amount is generally 20%, but it can also vary depending on the value of the property for which you are applying a home loan.
Registration and transfer fees: Can be also called conveyancing fees. These types of fees go toward attorneys that register the real estate in your personal name and those inclcuded in the mortgage of your property. Fees are assessed by the Law Society and strive on a sliding scale. The more the purchase fees, the higher the fee.
Deeds office levies and fees: The Deeds office is responsible for the registration of ownership and other rights regarding immovable property. This is a government office under the jurisdiction of the Department of Land Affairs.
Rates and taxes: Before property can be transferred to your name, the rates due on the property must be paid in full for the financial year. As a buyer you will be responsible for a pro rated amount for the part of the year you will occupy the property. You will also be charged for a rates clearance fee certificate.
Some of the most important that has to be considered while owning a home are the cost of the property and the life insurance which adds up to the overall costs. Also the moving costs, water, electrical and the household costs should be calculated for budgeting.
About the Author:
Tom Martens is the marketing director for Homeloans-southafrica.co.za. South Arica's leading Home-loans portal
posted by Credit Counseling at
1:33 PM
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