You see your dream home at a price you can afford, the repayments are within budget and you are ready to sign on the dotted line. Be aware of the costs involved when buying a home.
There are a myriad of costs involved to home ownership that you should be aware of upfront and make allowances for. Have the cash available to deal with these costs as most are payable up front to your transferring attorneys or bank and could get you into hot water if you have signed an offer to purchase without making allowance for them.
- Bond registration costs
- Transfer duties
- Conveyancing fees
- Deeds office fees
- Rates and taxes
- Banks charges
- Home owners insurance
- Life insurance
A typical home purchase of around R1 million would amount to about 7% of the purchase price excluding the deposit. Deposits can vary from 0% to as much as 30% depending on the property and your credit rating.
Other costs to consider
- Moving costs
- Water, rates, and electricity
Moving into a new home has many additional and ongoing costs to consider. The likelihood is that you are moving to a larger home or a home with a garden or in a better area. Make sure you know what the rates are, they are different for every area and dependent on the size of the property and many other factors.
If you now have a garden you will need a lawnmower, use a lot more water, have additional security costs like armed response or electric fencing or both. These can amount to over R1000 a month and lets not forget what it costs to maintain an electric fence or automated gate.
Be aware of every possible additional cost going forward. Ask the real estate agent for all of the information about the average rates and taxes, water consumption and the prominent security services in the area. Call the security company and find out what the monthly costs are. DO THE RESEARCH, buying a home is a long term investment.