Mil­len­ni­als ar e keen t o be home­own­ers

Weekend Witness - - Mone Y -

MIL­LEN­NI­ALS all o ver the w orld have been much slower to en­ter the prop­erty mar­ket than their p ar­ents or gr and­par­ents were, but that doesn’t mean they don’t want to be home­own­ers, said Shaun Rade­meyer, CEO of Bet­terBond Home Lo ans.

“The de­mand is es­pe­cially no­tice­able among this group in SA, where first­time buy­ing still ac­counts for about 40% of all home pu­crhases at the mo­ment, ” he said.

One rea­son is that S A has a v ery “young” pop­u­la­tion.

Another rea­son is that S A has, sinc e 1994, ex­pe­ri­enced a huge rise in the num­ber of mid­dle­class peo­ple for whom home own­er­ship is a ma­jor as­pir ation.

Mil­len­ni­als need to know they will be liv­ing there long enough — about five to seven years — to re­coup the “hid­den costs” of their pur ­ chase, such as trans­fer duty and bond reg­is­tra­tion and le­gal fees. They need to scru­ti­nise their fi­nances be­fore buy­ing to max­imise their mort­gage pot en­tial. R ade­meyer pr es­ented some other fac­tors for mil­len­ni­als to con­sider be­fore set­ting out t o bu y. • DEBT The debt­to­in­come ra­tio is a c om­mon term used in the mort gage in­dus­try that mea­sur es po­ten­tial bor­row­ers’ monthly obli­ga­tions ver­sus gross in­come, and most banks will be look­ing f or a le vel belo w 36 %. • IN­COME Lenders want to see that bor­row­ers can sus­tain home­own­er­ship, which is w hy they gen­er­ally ask f or p ay slips and t ax r eturns f or at leas t two y ears. • DE­POSIT Bet­terBond statis­tics show the av­er­age de­posit re­quired by first­time buy­ers is cur­rently 11% of the pur chase pric e. • SAV­INGS The costs of home­own­er­ship don’t end when you move in. Have at least six months’ of liv­ing ex­penses in sav­ings be­fore pur­chas­ing. — BE.

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