Seven things women really need to know about buying a home
Many more single women are becoming home-owners, which is great step forward for financial empowerment. Residential property is the type of asset that is most used as the foundation on which to build personal wealth.
“But whether they are career women or single moms or widows, women have more obstacles to overcome and more factors to consider than either couples or single men when it comes to buying a home of their own,” says Carl Coetzee, CEO of BetterBond, SA’s foremost home loan originator.
“Sadly, there is still a gender pay gap, for example, which makes it harder for women to save deposits, qualify for bonds and afford the monthly repayments. In addition, home sellers sometimes don’t take single women buyers seriously, so they can have difficulty getting their offers accepted. Women also have to be super vigilant about proper home security and the safety of the neighbourhood they choose.”
However, he says, it really helps to work with qualified and experienced estate agents and a reputable originator like BetterBond – “and to make the process even easier, we have put together the following home buying guidelines for single women as a fitting end to Women’s Month”.
· The first step is to get financially fit, because although the banks are currently very keen to lend to home buyers, they still want to see a clean credit record and are obliged in terms of the National Credit Act to make sure that borrowers can really afford the repayments on a home loan. “So check your credit record, fix any issues with bad debt, and pay off as much current debt as you can before you start looking at homes for sale.”
· Second, Coetzee says, you should save as much as you can for a deposit. Buying a home should not be an impulse purchase but something you plan for with care, because you don’t want to end up as a “slave” to your bond. It is really worth taking a year or two to save a deposit and keep your monthly instalment as low as possible. This will also make it easier for you to qualify for a home loan and may even mean that your originator can get you an interest rate concession.
· Third, you should ask your originator to help you obtain pre-approval for a home loan. “This will give you a clear idea of how much you can spend on a home and will also make you more competitive as a buyer. Sellers will definitely take you more seriously if they know that a lender has already pre-approved you for a loan.”
- Fourth, you need to spend some time researching and thinking about areas to buy in, the type of property you want and how big it should be, and then doing some “comparative shopping” on the various online property portals, he says. “If you have children, you might have to compromise and pick an area that is close to good schools and perhaps a bit further from work or the shops. Or maybe you would prefer to live close to your support network of family and friends. Safety is also paramount, so an apartment or townhouse in a secure complex might suit you better than a freehold home with its own garden – and even more so if you don’t have much time for home maintenance. On the other hand, you might like gardening and growing your own food, or have pets or children who need play space. It’s going to be your home, so you need to choose carefully.”
- Fifth, Coetzee says, you should never be embarrassed or feel afraid to ask as many questions as you like about the property market in a specific area, the process of financing, buying and taking ownership of a home, the terms of the offer to purchase or sale agreement, or the various costs associated with the transaction. “This is especially important if you are a first-time buyer, and professional agents and originators will be pleased to assist you as much as you need. If anyone is reluctant to answer your questions or brushes you off with vague statements, they are not being professional and you should avoid dealing with them.”
- Sixth, once the time has come for you to make an offer on a property, you need to stay calm and remember that this is essentially a business transaction. “This may seem like your dream home, but you should not be blind to the fact that it may have faults that will cost you money to fix, for example. It may also be stressful when the seller wants to negotiate the price or when the bank is taking longer than you thought to approve your home loan. But once again, if you keep your head and allow the professionals to do their job, things are very likely to work out well.”
And finally, he says, you should not forget to start boosting your “emergency fund” once you have completed the purchase and become a proud home-owner. “As a single person, you don’t have a second income to fall back on if you lose your job, fall seriously ill, or need money for an emergency repair, and it may be very difficult at that point to borrow from family or get a personal loan, so we suggest that you aim to save six months’ worth of all your expenses as soon as possible – preferably in an access-type bond account. This means your access to your savings won’t be restricted if you need the money in an emergency, but that you will be getting a double benefit if you don’t need it. You will get a better effective rate of interest than on cash in the bank, and depositing your savings into your home loan account each month will also help you pay your loan off faster and save thousands of rands worth of interest. (Ask your BetterBond consultant how this works or see https://www.betterbond.co.za/calculators/additional-payment