Avoid common house-buying mistakesThe excitement of buying one’s first house can be overwhelming.
Particularly in Namibia with its housing market renowned for having the second-fastest growing house prices, and analyst debates around a possible coming house price bust.
Being among the most complex purchasing decisions individuals will engage in, would-be home owners should thus ensure they do their homework thoroughly before ever getting started, according to FNB Namibia’s Home Loans national sales manager Magda Talbot.
In an article issued yesterday, Talbot suggested a number of tips buyers should keep in mind to avoid disappointment.
The most important consideration, she says, is affordability.
“Often first-time buyers are overly optimistic about their affordability,” Talbot says.
“Merely taking your income into account is not an accurate assessment of your affordability, as there are expenses that will have to be maintained along with your bond repayments.
“Before starting to look for a home, potential home owners should get an indication of the loan size they qualify for.”
Another important consideration, Talbot says, is your expenses - of which the bond is only one.
“Once you have successfully bought your house, you will need to be realistic about doing things like furnishing your home. It is not wise to take out credit to furnish your new home. You will need to do this gradually so that you can keep up with your bond repayments and all the additional costs related to your home”.
Other expenses that need to be budgeted include municipal rates, insurance and levies.
A third concern to take stock of is how different types of properties affect your finances.
“For example, when you purchase a sectional title you are buying a unit in a complex or a development,” Talbot says.
“Sectional titles are considered a more affordable option, because you would pay fees often referred to as levies that go towards covering your home insurance and the general maintenance of the common property for the whole complex.”
Someone who chooses to purchase a freehold property, on the other hand, whether freestanding or a cluster house, would have to maintain such property themselves, she says.
As such, she suggests that over-eager applicants should not completely rule out renting, and that they think practically despite the excitement that comes with home purchasing.
“You can save up for a deposit to ensure that when a good deal comes along, you will have a very good chance to secure the mortgage and the house that you really want, in an area that you have thoroughly researched,” she says.
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