Millennials ar e keen t o be homeowners
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.