Credit Score

Are you ready to take the plunge and buy your first home?


* This article first appeared in our digital magazine Property360

Economic conditions may be tough, but the real estate market is still active, thanks to low interest rates.

With lower house prices and interest rates, potential homeowners could pay off their 20-year bond and save money on interest, says Sbusiso Kumalo, marketing director of African Bank.

When buyers ask for a bond, they will find that all the banks will be looking at their credit score and this is where a good score will either come back and delight them or haunt them. So, if you are thinking of buying a property, knowing your credit score is the place to start.

Read the latest Property360 digital magazine below

Understand and improve your credit score

Kumalo says he can’t stress enough the importance of a good credit score. “If your credit score is low, you will probably have a hard time getting a loan from any store or bank, while a higher credit score increases your ability to access credit, such as a bond or loan.” favorable.

“Understanding how your credit score is calculated will give you insight into how businesses perceive you based on your credit history and how you manage your money.

“It also allows you to confirm that all debts against your name are correct,” he says.

You can improve your credit score by following these steps:

• Go to a credit report – you can do it for free once a year – and make sure the information is correct.

• Pay your bills on time. The easiest way is to set up automated bank payments.

• Track your monthly expenses on a budget and save for emergencies instead of having to take out a loan to meet unexpected expenses.

“By improving your credit score, you improve your overall finances, which is good when it comes to applying for a loan and having the peace of mind that you are ready for that financial commitment.

“If you get a home loan, keep your credit report clean so you can apply for credit to make improvements to your home to increase its value.”

Choose a house with potential

Adrian Goslett, Regional Director and Managing Director of Re / Max of Southern Africa, says that when buying a home you need to make sure that the property has the potential to increase in value over time.

To do this, you need to consider location, which is a key part of the home’s value growth potential, and pay attention to the price of other homes in the neighborhood, as well as future development plans for the neighborhood.

He adds, “Ownership is one of the most expensive purchases you can make. To make sure these purchases work for you rather than against you, you need to view this decision as a medium to long term investment.

“To have the best chance of getting a good profit on the sale, owners should hold a property for about five to 10 years. This means that they need to be sure, before making the purchase, that they can live in the house for a number of years.

Purchase off plan

For many buyers, especially first-timers, buying an off-plan property is an attractive option, says Bruce Swain, Managing Director of Leapfrog Property Group.

As with any investment, off-plan buying involves an element of risk.

However, there are a number of ways to manage and mitigate this. “Naturally, some buyers are worried about paying for something they can’t yet see and that the end product won’t be what was sold to them in the development phase. These are legitimate concerns, which is why it is important to approach this type of investment with an open mind and armed with the right information.

He says off-plan buyers should:

Check the developer credentials: Start by verifying the legitimacy of the promoter by checking if they are registered with industry bodies such as the Master Builders Association or the National Home Builders Registration Council. Take a look at what other work the developer has done and ask yourself if the project was completed on time and on budget.

Stay close to the project: Rather than buying the property and forgetting about it until it’s ready to move in, you should take an active interest in the development by regularly visiting the site, engaging the developer on the progress, and generally staying in the know. of the situation.

Understanding the fine print: It is always a good idea to familiarize yourself with the contents of a contract or agreement that relates to the purchase of a property. In the case of a VEFA, pay particular attention to the choice of materials, the date of occupancy and the buyer’s right to terminate the contract if the promoter does not fulfill his mandate on time.

Buy an old house

Claude McKirby, co-director of Lew Geffen Sotheby’s International Realty in the southern suburbs of Cape Town and False Bay, says buying an older home could give you access to a stronger market and a better neighborhood than you might otherwise be able to afford. to allow.

Older properties often have great character features, are larger, and are generally more solidly built than newer homes. However, they can also be the subject of nightmares if buyers are not careful.

Cobus Odendaal, Managing Director of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg suggests that you make a list of factors to check and questions to ask before visiting the property so that you can make an informed decision based on facts rather than on emotions.

Factors to check include

Foundations / structural defects: While minor cracks can only be a sign of installation in the home, large cracks can be an indication of serious structural issues. Another sign that a home may be experiencing structural issues is that multiple door frames don’t appear square or that some doors are difficult to close.

Poor drainage / leveling: The most obvious sign of poor drainage is water buildup, but another is an inflatable bathroom floor which can be evidence of hidden damage such as a leaking shower drain. If the garden has mini-lakes or continually muddy patches, the property may have poor drainage.

Rising humidity: Look for bubbles on the exterior walls as this could indicate that the wet layer was not put in place at the construction stage.

Electrical wiring: It is common to see extension cords running from room to room in older homes, putting a load on the electrical system. Another common problem is bare wires, often the result of DIY repairs.

Roof: Ask about the age of the roof as most have a lifespan of around 20 years. Slate tiles that don’t line up and cracked tiles are telltale signs of potential leaks.


Leave a Reply

Your email address will not be published.