Please help me budget for my first home

Chingha said:
The other costs to consider are alterations, little things you think might bother now will be must dos once you move in. Add them to the bond amount now or budget for them in x amount of time.
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That's the thing, I've got no idea what alterations cost. How much have your last few alterations cost, if you don't mind me asking?
 
The best purchasing advice that I was ever given:

1. Buy the worst / smallest / most modest property in the best area that you can afford.
2. You don't have to buy a dream home that fits your needs now, today. Too many people make the mistake of buying a home like they buy a car: to impress their mates. The important thing is to get into the market, even if it means that 4 children have to share one room. The dream home will come later, after your 2nd or 3rd purchase, which you will then be able to afford.

On affordability: Make sure that you budget for rising interest rates, never buy to the max that an institution is willing to lend you.
 
Well it depends what you buy. If you buy a townhouse then you will have a fixed monthly levy but your security will be mostly sorted and also most outside building maintenance.
Your own freestanding house all going to be on you. And owning a house, maintenance is very important. If you leave things the cost to repair will become huge. If you handy you could fix most things yourself for relatively cheap. Painting of house and roof can get very expensive quickly these days.
 
Jean Claude Vaaldamme said:
Well it depends what you buy. If you buy a townhouse then you will have a fixed monthly levy but your security will be mostly sorted and also most outside building maintenance.
Your own freestanding house all going to be on you. And owning a house, maintenance is very important. If you leave things the cost to repair will become huge. If you handy you could fix most things yourself for relatively cheap. Painting of house and roof can get very expensive quickly these days.
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True ... so based on what I've seen, average levies for a 3-bedroom apartment in a complex is around R3000/month. What is the cost of repainting a 3-bedroom house (walls and roof) and how frequently does one need to budget for that? It's these sort of mystic costs I'm trying to get a sense of with this thread :) Got any figures you can share?
 
Foxhound5366 said:
Nice, thanks for more data hey! You're way beyond where I'm going to be with my first home hey, so hopefully some of those expenses there I can adjust downwards :)

Something I'm wondering is how critical it is to get prepaid electricity upfront for whichever house I buy. I mean I know you can apply to get a prepaid meter installed, but I've heard horror stories about it. There's just so much risk in getting a monthly electricity postpaid statement from Johannesburg, I'm seriously debating whether this should be a deal-breaker on a home purchase here.
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So we have prepaid. And I prefer that.

Also Tshwane allows you to send in your meter readings. No idea of JHB allows that.

Two things that made a difference to my power consumption was when we moved to a+ rated fridge and washing machines and switching the geyser to 60 degrees.
 
airborne said:
He does have a point though, South Africa doesn’t have the most stable economic outlook and interest rate hikes have taken out more than a few people in the past when their bond repayments suddenly become untenable.
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Indeed. My bond has gone up over 6k since I bought this place nearly 2 years ago. Seems like the OP only wants good news though, so not sure why he's even asking for advice if he knows it all.

Edit: Just checked my payments and although the offer was accepted in Sept 2021, my first payment was Jan 22. From then till now the bond has gone up by R6145.19. That's in a year and 4 months.
 
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Spizz said:
Indeed. My bond has gone up over 6k since I bought this place nearly 2 years ago. Seems like the OP only wants good news though, so not sure why he's even asking for advice if he knows it all.
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Spizz, if you're not contributing actual values, what are you doing here? Just a circle-jerk with your mates?
 
Grubscrew said:
Two things that made a difference to my power consumption was when we moved to a+ rated fridge and washing machines and switching the geyser to 60 degrees.
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I've heard a solar geyser is a great investment ... maybe a good entry point into the whole solar thing, before making the R200 000 plunge into a moderate system?
 
Foxhound5366 said:
Spizz, if you're not contributing actual values, what are you doing here? Just a circle-jerk with your mates?
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I'm just expressing surprise. I read that post and based on my own experience thought 'good advice'. Then I see you being so rude and it annoyed me so I replied. It's incredibly relevant to today as my edited post points out and could break a lot of people. You obviously know everything though so as someone else pointed out to your arrogance 'good luck'.

Oh, and it's an open forum and I'll post where and when I want, thanks.
 
Spizz said:
I'm just expressing surprise. I read that post and based on my own experience thought 'good advice'. Then I see you being so rude and it annoyed me so I replied. It's incredibly relevant to today as my edited post points out and could break a lot of people. You obviously know everything though so as someone else pointed out to your arrogance 'good luck'.

Oh, and it's an open forum and I'll post where and when I want, thanks.
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So basically you still have nothing of value to contribute. No change then.
 
Foxhound5366 said:
So basically you still have nothing of value to contribute.
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Lol. You think someone advising to watch about your bond going up over R6k in 16 months is not contributing? :ROFL:

Foxhound5366 said:
No change then.
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Funny, I'd always thought you one of the good guys and I guess that's why I'm persisting. Imagine though being such a dick that you schit on someone taking the time to reply and offer what they thought was good advice? Just wow.

Enjoy your little echo chamber fella.
 
Spizz said:
Lol. You think someone advising to watch about your bond going up over R6k in 16 months is not contributing? :ROFL:



Funny, I'd always thought you one of the good guys and I guess that's why I'm persisting. Imagine though being such a dick that you schit on someone taking the time to reply and offer what they thought was good advice? Just wow.

Enjoy your little echo chamber fella.
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Maybe I am one of the good guys still and I’m just sick of people who smugly come into practical threads like this with Lala-land advice like being prepared to double your bond and have 6 months bond saved up and … do they know which country they’re living in and what our economy is like at the moment? If I can’t afford a house in South Africa, basically noone can … so I guess we can all sit and sob over a beer about cost of living and the blerrie ANC. Not all advice is well-meaning or constructive, given the context and reality of the situation. Sometimes it can be called out for what it is: holier-than-thou, pie-in-the-sky, disconnected trash.
 
If i were you, I would start with, take your payslip... work out what is 30% of that before taxes, and that is your benchmark (what can be spend on a bond)

Then I would apply at the bank for a pre approved bond. That means, what are the bank willing to borrow me.

Related to expenses, if you apply for a bond you need to complete an income and expenses sheet.

Things to consider:
1. Buying a full title place, or a sectional title.
With sectional titles, there are levies and other expenses linked.
2. Rates and taxes
3. Life insurance if applicable

So my advice, look for what you qualify first. Thats step 1.
 
Foxhound5366 said:
Maybe I am one of the good guys still and I’m just sick of people who smugly come into practical threads like this with Lala-land advice like being prepared to double your bond and have 6 months bond saved up and … do they know which country they’re living in and what our economy is like at the moment? If I can’t afford a house in South Africa, basically noone can … so I guess we can all sit and sob over a beer about cost of living and the blerrie ANC. Not all advice is well-meaning or constructive, given the context and reality of the situation. Sometimes it can be called out for what it is: holier-than-thou, pie-in-the-sky, disconnected trash.
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It’s a bit weird that you think someone should know your financial position before replying with a point about a concern many will have. The spiralling interest rates are no joke yet as someone who earns a lot of Euros a month it doesn’t affect me personally, but as I said, I read it and thought it was good advice and probably relevant to many people.

So it wasn’t relevant to you? Who knew? Especially when you ask about garden services and renting solar? As the man said, these things are Mickey Mouse stuff. But crack on lad, if it helps, my garden service charge R80 a week to do my lawn every Friday.
 
Spizz said:
Indeed. My bond has gone up over 6k since I bought this place nearly 2 years ago. Seems like the OP only wants good news though, so not sure why he's even asking for advice if he knows it all.

Edit: Just checked my payments and although the offer was accepted in Sept 2021, my first payment was Jan 22. From then till now the bond has gone up by R6145.19. That's in a year and 4 months.
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Thats reality. If you bought in the last 36 months (let make it 30)... the interest rate wheel is upwards. But good news, we are far from 17 to 20%. Just prepay your bond
 
Foxhound5366 said:
Dude, it's risky to sign a two-year cellphone contract when you could get retrenched out of the blue tomorrow. At which point do you decide the risk is 'acceptable'? That's a personal decision I guess. The reality is that most South Africans are credit impaired, never mind still paying off debt. If you have stable full-time employment and a clean credit record, then I'd say you're doing better than the vast majority of your fellow citizens already. Would it be nice to have a year's salary saved upfront in some interest-generating investment? Hell yes! Am I going to continually beat myself over the shoulders for the fact that I don't have that ... yet? Nope. That's what the 'yet' is for.
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If you are equating the risk of buying a home that’s 100 times more expensive and requires a 20yr mortgage to the value of a 2yr cellphone contract maybe some time for some introspection. The point is have a cushion saved up so if something does go horribly wrong you don’t suddenly find yourself looking face to face with bankruptcy. It could just be delaying buying a house for a year or two, hardly a train smash. It’s called being prudent. That being said sometimes it is fair or even necessary to throw caution to the wind, just be prepared for all eventualities.
 
RedViking said:
-coffee machine
-Moka pot
-v60
-chemex
-syphon

/sorry, wrong thread
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Well OP is about to take on some serious expenses so a better suggestion would be

Poppy flowers
Crusher
Bipolar solvent
PVC sheet

Calms the nerves and can be profitable if you are willing to move in the "right" circles
 
airborne said:
If you are equating the risk of buying a home that’s 100 times more expensive and requires a 20yr mortgage to the value of a 2yr cellphone contract maybe some time for some introspection. The point is have a cushion saved up so if something does go horribly wrong you don’t suddenly find yourself looking face to face with bankruptcy. It could just be delaying buying a house for a year or two, hardly a train smash. It’s called being prudent. That being said sometimes it is fair or even necessary to throw caution to the wind, just be prepared for all eventualities.
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I would call any debt/contract commitment.

I know a fellow employee who rents for years now. He wanted to buy, but are put off with all the interest rate increases. In some cases you will score to rent vs to buy. But you need to ask, do I want to rent forever? You can pay a bond off in 10 years. Its called commitment. Work for something which is an asset. It increases with value year on year.
 
Only advice I can offer is try and deal directly with a bank, or at least end up with a bond directly with the bank (not supported through some originator). It is more work at the beginning, but pays of in the long run.

I have asked that ZAR home loan place twice to " look after me" , a client of 11years with a good credit score. Every time they told me to pound sand (although they probably have the Bond sitting at some bank under their name profiting from me all while doing zilts)

I have another bond with big red, and the two times I asked, both where met with a yes and 50 basis points knocked off.

They were also offering a Covid relief (didn't ask, they called me directly) where the other just told me to FO. I didn't use it from the one, but I figured to ask for the other just to test their response
 
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