When buying a home in South Africa their is other expenses over and above your home loan that you need to consider. Make sure you budget for these expenses before you decide how much you can afford on your home loan in South Africa.
Home Loan Installments – You have to settle your bond payments and allow for an increase in your monthly installments on your home loan at any time.
Deposit – You might be required to give a 10% deposit on the purchase price. A deposit will also assist you in getting your home loan approved for the amount you applied for and may even help you negotiate a better interest rate on your home loan.
Insurances -You may be required to take out some sort of insurance to protect your mortgage in case of death and you need these installments in mind when you look at your budget. For full title houses, you will also be required to take out home owners’ insurance on the structure.
Transfer Fees – All attorneys follow a recommended tariff by various Law Societies with the effect that one attorney is not more expensive than another.
Levies, Rates and Taxes – If you have bought a sectional title, you will also pay levies from now on, which may also be increased should the trustees feel the need to do so. In case of full title, you will pay rates and taxes together with your utility charges.
Postages and Petties – An attorney may also charge you for sundries like postage and telephone calls. This fee is usually in the vicinity of R350.00 plus VAT.
Water and Electricity – Home buyers should also keep in mind that they need to pay a deposit for water and electricity either to the local council or the body corporate, and of course the monthly charges from there on.
Transfer Duty – This is a major expense and is a form of tax payable to the Receiver of Revenue before lodgment of your transaction in the Deeds Office. If you do not have that kind of cash available you will have to borrow it under your home loan which will result in extra interest charged.
Bond Costs – The conveyancer will charge you a recommended fee as set out in by recommended tariffs by the various Law Societies.
Extra Charges – There are also some extra charges such as a Deeds Office enquiry fee (About R65), a fee for FICA attendance (R150) and a fee payable to the Deeds Office on date of registration of your transaction (up to R500).