With the recent cut of the interest rate, many people would be thinking of buying their own home instead of renting - and now might be just the right time to do so, according to the Seeff Property Group.
The recent lowering of the interest rate have brought down the cost of home loans therefore making homeownership a little more accessible for first-time home buyers.
Samuel Seeff, chairman, Seeff Group said that given that property prices have been fairly flat over the last two years, now might just be a great time to take the leap to homeownership.
The benefits of putting your money into your own home cannot be overstated and while it is a huge financial commitment, it is one of the best things you can do for stability, building wealth as well as securing the roof over your head.
Seeff said that we are in a favourable cycle for the interest rate to drop during the first half of 2025, however, people do not want to wait for more rate cuts as a sudden rise in buyers could make it more competitive, and you could end up paying higher prices.
Prospective buyers should use these opportunities to negotiate a better price if they can and they can do this by going through a pre-approval process for a home loan so that they can confidently put in an offer.
If you are unable to afford the property on your own, co-buying could be the solution. You should also make sure that you can afford the transaction costs, or include the costs in your home loan if that is available.
Seeff advises people to buy sensibly. Instead of overcommitting, you can start small and grow with your needs.
Consider buying an apartment if that is all you can afford and upgrade later as your financial position improves or you could buy a smaller or an older house that you can upgrade and extend.
Property is a long-term investment and it could take at least five to seven years before you will start making a real dent in the capital borrowed, according to Seeff.
You should invest as much spare cash into your property and aim to pay it off as fast as you can. Your home is an asset, and you should treat it as such by preserving it and potentially growing the value of it.
Before you buy, you should now what you are in comparison to a rental as owning your own home does come with additional expenses.
Along with the monthly home loan repayments as well as utility and upkeep costs, a homeowner is also responsible for paying property taxes which tenants usually don’t do.
As a homeowner you may also have to budget for levies if you buy in a complex or estate because there would be additional levies for the upkeep of the common property, and security. Get a list of the extra costs beforehand so that you are financially prepared.
With an older property you may you may need to set aside extra money for more maintenance as issues you may have issues pooping u, or aspects that need to be upgraded.
While the structure and certain fixtures like the geyser may be covered by homeowners’ insurance, you may need to budget for emergency repairs or things that are not covered by the insurance.
Ensure that you keep your property maintained to retain its value as building structures and fixtures can deteriorate over time.
Regular maintenance such as fixing leaky taps, broken hinges, handles, tiles and lights or cleaning gutters can preserve your investment. This is particularly important if you decide to sell for whatever reason.
Be frugal with renovations or upgrades and stay clear of fads as well as trends as these come and go. It is always advisable to stick with neutral upgrades as taste and preferences vary between different individuals.
Keep your insurances up to date, both the homeowners’ insurance and well as the insurance for your household contents. Ensure that the property is properly secured, and regularly test the security features.
IOL Property