Although 2022 kicked off with an interest rate hike, South Africa’s housing market is expected to remain favourable for buyers and property investors. But before you start the search for a new home, it helps to know how much you can afford and how cost increases might affect your pocket a year from now, says Andrea Tucker, Director of MortgageMe.
“House hunting is incredibly exciting, but it really shouldn’t be the first step in the process. Knowing exactly how much you can afford gives you accurate insight into your price range so you can shop responsibly with confidence and make an offer on your dream home with cash to spare,” she says.
A bond calculator allows buyers to easily determine the costs associated with the purchase of property. It calculates the monthly repayments of a home loan amount over the chosen term. “Keep in mind that bond calculators don’t take into account other costs associated with home ownership, like homeowners’ insurance, rates and taxes, and maintenance costs, so be sure to factor those in too,” notes Tucker.
The next step for buyers is obtaining that all-important bond certificate affordability assessment. “Take 15 minutes during your lunch break to do a bond certificate with MortgageMe. This will be handy when the big moment arrives and you’re finally ready to submit an Offer to Purchase. It gives you, the seller and agent an indication of how much of a bond you can afford to pay off based on your current income and expenses. If you’re married in community of property or are anticipating getting a joint home loan with your partner or spouse, do this exercise with them to get a view on your household income and potential affordability.”
Tucker says removing the temptation to look at houses outside of one’s price range is another good reason to get a bond certificate. “Save yourself valuable time and energy by not looking at houses that will stretch your finances to breaking point. Even small changes to interest rates over time will have a significant impact on your monthly repayments. Put another way, should interest rates return to pre-Covid-19 levels you could pay as much as R1594 more every month on a R1 million bond.”
“The good news for buyers is there’s enough robust activity in the market to find well-priced property that ticks all the right boxes – more commonly referred to as your dream home,” says Tucker.
Check your affordability with a MortgageMe bond certificate here.