Adjusting to becoming a home owner

Since lockdown began, the first-time buyer s market has

’ grown substantially, with firsttime buyers accounting for 70% of all home loan applications through BetterBond in recent months.

According to regional director and CEO of RE/MAX of Southern Africa, Adrian Goslett, new homeowners are likely to go through a period of adjustment as they become used to the responsibilities of homeownership.

The first thing new homeowners will need to get used to is that the ongoing maintenance costs that used to be at the landlord s expense

’ will now be their responsibility.

Many new homeowners

“ fail to plan for emergency expenses that crop up with property ownership, which makes it difficult for them to afford the repair work when things break unexpectedly. To avoid this,

“homeowners should have a readily available savings account that they can access in case the geyser bursts or the roof starts leaking, and this needs to be seen to this immediately,” Goslett recommends.

Similarly, new homeowners will need to pay attention to the Monetary Policy Committee s interest

’ rate announcements, as these will have a direct impact on the interest charged on their home loan.

Especially now that

“interest rates are at an all-time low, I would recommend purchasing well within your budget to leave room for future interest rate increases,” Goslett advises.

Those who are used to having the flexibility of being able to relocate after a couple of months notice, will also

’ need to get used to the financial responsibility of being locked into a home loan for the next 20 to 30 years. The financial

“consequences of defaulting on your home loan repayments can be way more severe than if you skip a month of rent. Homeowners need to be

“prepared for this responsibility before they make a purchase they will later come to regret.”

Beyond these new responsibilities, Goslett reminds first-time buyers that homeownership also comes with a host of new perks.

As a tenant, the possibility “of annual rent escalations loomed ominously above your head. Now, as a homeowner, the reality of annual house price growth is a nice incentive to keep up with the repayments on your home loan.

Each monthly instalment

“is a further investment into your future wealth.”

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