Are you one of the many South Africans who wants to buy a new home by means of a home loan? Are you unsure of all the extra costs involved apart from the actual cost of the property? In this article, I will discuss the extra costs that should be budgeted before approaching a home loan company. It is utmost importance that you familiarize yourself with these costs to ensure that you know what you will be spending at the end of the day.
Firstly, the largest amount that you would have to pay would obviously be the price of your new home itself. Bear in mind that by using a home loan company you don’t have to have that amount of money beforehand. There are thus a few extra costs involved even if you are making use of a home loan. The extra fees will include the fee of registering the home bond, the fee to transfer the property to your name and the legal fees that need to be paid to the various attorneys.
The costs involved related to the home purchase itself includes the transfer duty, deeds officer tariffs and the conveyance fees. New homeowners should pay the transferring fee before the property can be registered on to their names. The amount payable is paid to the transferring attorney also known as the conveyancer, which he then pays to S.A.R.S.
Another factor to bear in mind is that transfers cannot be registered until the local authority has issued a rates clearance certificate. This means that if the seller didn’t pay all outstanding rates and taxes on his property, the buyer will be entitled to pay the outstanding amounts. This is usually a cost which is paid by the seller, but in some cases, the buyer agrees on paying the outstanding amounts.
There are very few South Africans who can purchase property without getting a home loan, and by applying for a home loan costs money. The registration fees aren’t just for the bank, but for the attorneys which handle the registration as well. Finally, is the assessment fee which you need to pay in order for someone to evaluate whether the property is worth the amount you’re paying for it.
There are numerous amounts of extra fees that need to be taken into consideration before applying for a home loan so that you know exactly what you will be paying for your new home at the end of the day.
We all know that before buying anything, you will always do some quick calculations to establish
whether you will be able to afford the item or how much you are able to spend on that item. By
doing these calculations will help you to focus on only the products that suits your financial criteria
and eliminating unrealistic options regarding that product. It will help you to focus on the things that
you can afford.