Home Loan Qualification Criteria for first time home buyers

Home Loan Qualification Criteria for first time home buyers

home loan qualification criteriaIf you have recently thought that you no longer want to waste money on paying rent and you would rather use the money to pay into a home loan then it is possible to do so. For your own purposes, using the mortgage calculator will give you an idea of what the payments will be according to the amount you wish to loan for the purchase of your new home. Continue to read the home loan qualification criteria to see what your chances are of getting the loan you need.

There are factors and criteria that are required to qualify for a home loan. This means that the bank needs to know that you are able to pay money towards the loan every month. Therefore proof of a job, the amount you get paid and how long you’ve worked at the company or if you are self employed you need to at least have 2 years proof, your ID is also important. As the bank needs guarantees, you would need to fit into a certain income bracket to qualify for a home loan which is calculated according to your means.

There are two options for first time buyers: 1.If you have money that you can put down as a deposit for a home loan or 2. you do not have a deposit and you qualify for a home loan then the bank can grant you over a 100 percent loan.

In order to determine the amount you will pay the bank back every month is based on the interest rate.  If you have money and you put a deposit down depending on the amount of the deposit in ratio the cost of the house; the bank will calculate a percentage using a loan to value ratio. This ratio refers to the amount of the bond that you’re applying for and the cost/value of the property you want to purchase.  The percentage that is calculated will determine the amount which will become part of the interest rate you pay every month.

The minimum bond you can apply for is between R100 000 and R150 000 so if your LTV which is your Loan To Value ratio is calculated at a low percentage this means that the interest rate will be low as well; as it is directly proportional to the interest rate in other words the lower the LTV percentage the lower the interest rate will be to pay the bank back each month.

If you do not have a deposit then you can ask for a home loan that covers everything. Often first time home owners do not have extra money to put down as a deposit so therefore the bank makes provision for this. A bond for over a 100 percent normally 110 percent bond will cover the cost of the home and other home loan expenses including transfer fees for example.  As there is always a time period associated with applying for a bond the norm in this case would be thirty years. As terms and conditions vary inquiring at a bank or using findbond.co.za can assist you with your requirements and needs.

Investing in your own home means that you can renovate or build on to your home as you like and you have the financial aid to do so. Many banks or financial institutions have requirements in order for you to qualify therefore making sure that you have a reliable and stable form of income is the first step to take to qualify for a home loan.

5 reasons to place your home on Auction

5 reasons to place your home on Auction

property auctionWhy would you sell your property on auction? Many people are unsure as to the reasons to auction property. Here are some reasons to do so:

  1. Time is money: Placing your property on auction means that you are serious to sell; it also means that you will attract buyers that are ready to purchase. Property auction is a fast way and definite way to sell your property.
  2. Set price and terms and conditions: A seller is in a position to sell for the price they require. They decide what price they want to sell their property. Terms and conditions of the seller are clear. This means that the seller is in a position to demand what they require.  The conventional way to sell property with an agent implies that the purchaser decides the price. The property is often sold at a lower price then the initial selling price.
  3. Choosing the right auction firm: You decide which auction firm is suitable to sell your property. Established auction companies have an existing and large database of potential buyers. This is beneficial to you as it increases the potential to find a purchaser.
  4. Money in your pocket: After the property is auctioned the money is received by the seller at final closing. It is a fast way to ensure that you get paid straight away.
  5. Paperwork signed and completed: To auction property is legal and binding. An auction contract is set in place before the auction. Once the hammer is down it is confirmed that the property is sold.

Property auction is suited to reach a target market aimed at selling your property to keen purchasers. Experienced companies illustrate a detailed marketing plan to sell your property. Potential buyers visit the property prior to sale. It is wise not to accept any offers prior to an auction because you could lose out on a good bid. In most cases property is sold for a price higher than expected by the seller. This is another reason auctioning your property is a good idea.

Throughout the years auctioning property has become popular because it is a sure way of selling your property at a set time and place. The seller determines the price and professional auctioneers will assist you should you be uncertain of the market and your property value.

Research your options and find out what costs are involved before you agree to an auction. Make sure that you have a realistic idea of what you require. Another reason auctions can guarantee the sale of your property is because buyers are eager to purchase. They bet against each other which raises the opportunity to sell for a higher price than you wanted.

If you are ready to sell and eager to sell then auction your property.  Interested and keen buyers are waiting for opportunities to purchase property.

Selling a house privately

Selling a house privately

Selling a house privately has both positives and negatives and in order to determine whether or not your home is best sold privately or through an estate agent you need to consider very carefully the possible pitfalls.

Option 1

Selling your home privately through an existing private sale channel like privateproperty.co.za is an option for those who are prepared to spend about R3000 on advertising but in return get assistance with paperwork in the form of bond approvals for the buyer and having access to documents for the sale of your property.

You are able to set your price expectation and negotiate the deal with the buyer directly in the knowledge that your documentation is correctly drawn and the bond will be handled professionally.

Option 2

Selling your home directly by placing your own adverts in the newspaper and taking advantage of agents selling in your area by putting up your for sale boards in positions which will take advantage of the agents advertised properties is a good way to get feet through your show house.

Private sale agreements for property, be it freehold property or sectional title, are available at most Waltons stores and good stationary suppliers. It is viatlly important that you have an attorney at your disposal who is aware of your property for sale who will be able to accept the deposit from the buyer into his trust account once your private sale has been successfully negotiated.

Bear in mind that while you will be saving the 5% to 7% in agents commission, the risks are fairly significant and you will be required to spend a lot of time  preparing advertising material, negotiating with the buyer and of course dealing with the banks regarding the bond and attorneys. Think carefully before you decide to go the private sale route and be sure that you have the time and energy to devote to the sale.

Before you place your home on the market privately or have a show day, read the tips and tricks to get your home sold.

Styling your home for showday, tips and tricks

Styling your home for showday, tips and tricks

Showing your property is not simply moving out for a few hours and hoping the estate agent is going to make magic, you need to prepare for it. You want to sell your home, show it in the best light possible without spending a lot of money.

Her are a few really handy things to do that will make those entering your home feel more enclined to make an offer.

Place a bowl of fresh green apples in a bowl near the entrance or on the kitchen counter.You have probably received scented candles as gifts that are sitting in a cupboard, get them out and make a candle display.

The scents you are looking for are fresh citrus and cinnamon or vanilla. These are homely comforting scents.

Get out your best crystal and display it neatly in your kitchen cupboards. A well looked after home makes a good impression.

  1. Shine you taps and bathroom fittings
  2. Clean any visible appliances very well.
  3. Place an unopened sachet of baby smelling fabric softener in the cupboards, who can resist the smell of babies!
  4. Vacuum you carpets with a scented conditioner.
  5. Give your furniture the once over with the vacuum and pretty up with cushions.
  6. Cut the lawn and remove any dead leaves from plants in the garden.
  7. Clean the swimming pool and brush the paving.
  8. Never leave any clothing or toys lying around.
  9. Borrow furniture or cushions from friends to make it more homely.

If you have any visble cracks or damp areas on walls or ceilings, you are going to need to spend a little cash to fix them. A fresh, clean, neutral wall colour goes a long way to catering for anyones tastes.

  1. Fix any cracks and paint the whole wall, not necessarily the whole room, but the whole wall.
  2. Clean the skirtings and paint if necessary
  3. If you have stains on your carpets, get them cleaned or cover with a simple rug.
  4. Clean or paint the ceilings. It’s amazing, but every person who enters a house looks up!
  5. If your garden hasn’t seen much attention for ages, go out and buy a few colourful and green plants.

The aim here is to spend as little as possible to make your home as welcoming as possible and to present it in a way that shows off all of the best attributes of your home. Most of these suggestions take a little time and very little money but will make a whole lot of difference in the final sale price that you achieve. Showing your house as a clean, well kept and much loved home will do wonders for the prospective buyers of your home so give the estate agent something to work with. The Estate agent has to spend hours in your home and the more he likes it, the better the chances are of him concluding a sale on your behalf.

Types of home ownership

Types of home ownership

The two different ownership types for residential property are Freehold or Sectional title. Know the difference between the two and what your obligations are.

Freehold

The most common form of freehold ownership is a free standing house which has it’s own erf number. The other form of freehold which is becoming more and more popular as people move away from large properties is a freehold cluster home.

In both of these cases the property would be owned by you along with any improvements thereon (house, swimming pool etc) and you would be responsible to pay for rates, sewerage and electricity directly to the council.

A less common form of freehold ownership would be in the form of a smallholding which would be less than 20 hectares and within 150km of an urban area.

On a freehold property, you are generally entitled to do as you please within the council building regulations and would not need to seek approval for any alterations or additions you may wish to do apart from submitting plans and having them approved by the local authority. In a small number of cases, for example themed cluster developments, you ,may need to seek approval from the developers to ensure that the overall theme of the development is not compromised.

Sectional title

A sectional title unit is simply owning a portion of the buildings and common property of a development. The most common forms of sectional title ownership are in the form or flats/apartments and townhouses.

Your section would be demarcated as the portion within the walls that you live. You would also be allocated an undivided share of the common property usually calculated as a percentage of your units square meterage expressed as a percentage of the total square meterage of the development. Some sectional title developments also offer ownership of the parking bays and these sections can be sold or purchased separately. In areas like Cape Town it is particularly important to ascertain whether the parking bay forms part of the common property with exclusive use or ownership of the parking bay/s is transferred. Parking bays have sold for large sums of money in areas where there is limited parking like Clifton and Bantry bay.

In a sectional title development you would pay a levy to the body corporate which is intended for the upkeep of the exterior of the building, the common property and any services required like security, auditing fees or general maintenance and upkeep of the development as a whole.

In recent years sectional title owners now each receive a rates account, where before the rates were calculated for the entire property, billed to the body corporate and then divided according to each units square meterage and share of the common property.