If you are planning to buy a home loan for the first time, then there are a lot of things that you should know or be aware of. We would, in this article, have a look at what those things exactly are.
Get to know about mortgage loan
It is very important that you are aware of the basics about loans especially home loans or mortgage loans. There are many names for mortgage loan like home loans, real estate loans, etc. Do not get confused or think of it to be something different as all of them mean the same. Mortgage loan is the most correct or proper name for such loans. Mortgage loans are basically pledging or mortgaging a property for receiving loan. When you get in touch with a mortgage lender and buy a house, then it means that you are the owner of the house and the things relating to the house becomes your property.
Your ability to borrow
Just because you want a home loan, it does not mean that you would get any amount of loan that you ask for. There are certain caps or ceilings for borrowing money and that limitation is decided on the basis of many factors. The first question that arises is relating to your affordability. Affordability means how much will you be able to borrow and how much you would be able to pay as interest rate monthly in the future. To be on the safer side and to ensure that you do not default in the future, the installment that you pay must not be more than twenty five to thirty percent of your regular monthly income. To get the tabular calculations done, you can seek help from an expert or a professional.
Types of home loans available
There are different types of home loans available in South Africa and you must be aware of them to be sure as to which one best suits your needs and requirements. Some of the types of home loans available are Free hold, Sectional title, 99 year leasehold, Share block, title deeds, etc. Freehold means that you own a land and everything that comes on it. Sectional title basically deals with flats and town houses. 99 year leasehold means that the person gets the home for a period of ninety nine years but never gets full ownership of the house. Share block means owning a certain portion of a residential building which is generally owned by the building company. Look into all these things and decide as to which suits you and excites you more.
Look into the total cost
When we talk about the costs of buying a home, we are not only talking about the purchase price of the house but also lot of other things that a first timer probably would not be aware of. The other costs would be the transfer duties, transfer costs, bond amount, registration costs, etc. All these things if brought together might cost you more than you were ready to pay before. So look into these aspects if you want to reduce the likeliness of you coming across a shock in the future.