Please help me budget for my first home

Not_original said:
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
Click to expand...
It’s my understanding that bond originators just do the legwork and get paid by the bank who you sign up with for bringing them the new business. So your relationship going forward is with the bank. If you feel that Absa would offer a better rate directly to you than it would through Ooba, that would be interesting. Personally I’d doubt that because a bank knows you’re getting multiple quotes through an originator and they have to be competitive or they’d just lose the business. But yeah, curious to hear if other people here have practical experiences of this? I’ve seen a couple people here saying they’ve gotten better interest rates through bond originators.
 
zerocool2009 said:
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.
Click to expand...
Yup, that’s what I’ve done. Did a full Ooba application last night for their pre-qualification certificate (apparently more accurate than the indicative figure they offer through their online tool - which I also completed).

I know the bond will be the most expensive cost, but all the other “mickey mouse” expenses also add up. I’ve rented my whole life to date, so have no frame of reference. So the practical numbers people are sharing here are super helpful :)
 
Foxhound5366 said:
More great advice, thanks ... you can really tell the difference between the people who're trying to be helpful and those who just want to preach hey.

BetterBond ... I'd forgotten about them. Any reason you went for them instead of Ooba? I think Ooba has been around a bit longer but I might be mistaken.
Click to expand...
They came highly recommended by the sales agent, and they really did do a good job.
 
Foxhound5366 said:
Yup, that’s what I’ve done. Did a full Ooba application last night for their pre-qualification certificate (apparently more accurate than the indicative figure they offer through their online tool - which I also completed).

I know the bond will be the most expensive cost, but all the other “mickey mouse” expenses also add up. I’ve rented my whole life to date, so have no frame of reference. So the practical numbers people are sharing here are super helpful :)
Click to expand...

Congrats on taking the big move. You will see, this is life changing, but for the good.

I am now 20 years in my primary house. Not 1 day sad I bought it in 2003! My bond was paid up in 2009. Just budget, stick with a plan, work hard, and put all surplus money into the bond. Let the prepay work interest off!
 
Expense wise, on top of the Bond you'd need

Property tax (on water and lights bill, renters shouldn't be paying thay directly, although 8ts probably part of your rent)
Be ready for an extra R800 to R1500 depending on size and area)

HOC (Building insurance) R400 to R700 depending on building. Great way to screw that up is having some thatch features. No just no, they rain dust constantly and smell musty eventually.

Live insurance (they will try and sell you life BOND insurance which covers JUST the Bond. It could be worth it idk as it will settle the bond without additional hassles if you expire) where traditional life cover may take a longer route and have the bank maybe chasing after your dead body pissing of those left behind. Just ensure you leave at least one or two payments in cash reserves for them not to stress about it if you go the normal life cover route covering the Bond as well

Upkeep, roofs leak, pipes go kapow, earth leakage breakers give out at 9pm on a Saturday and refuse to reset even when no wires are connected, drains block at least once in three years, always on Sunday(more if you live in a leafy (or should I say rooty) utopia)
 
Renting solar is just borrowing money from a niche credit provider. If you can work it into your bond somehow do so (better cash but alas)
 
Foxhound5366 said:
It’s my understanding that bond originators just do the legwork and get paid by the bank who you sign up with for bringing them the new business. So your relationship going forward is with the bank. If you feel that Absa would offer a better rate directly to you than it would through Ooba, that would be interesting. Personally I’d doubt that because a bank knows you’re getting multiple quotes through an originator and they have to be competitive or they’d just lose the business. But yeah, curious to hear if other people here have practical experiences of this? I’ve seen a couple people here saying they’ve gotten better interest rates through bond originators.
Click to expand...
True, just ensure you end up with a traditional bank as your bond holder and not some holding company
 
CT 3 bed house southern suburbs, no solar yet:

Elec 700-900 with gas oven + stove + kettle incl geyser and pool pump. Average 700 summer, 800 with AC.
9kg gas bottle every 3 weeks for the heater in winter. 9kg gas bottle every 6-8 months in stove.
ADT 450
Homeowners insurance 500
Home contents insurance X
Fibre 600
Domestic 250 per day
Gardener 250 every 2 weeks


As for maintenance, you will hear countless people with endless to do lists. That's because time becomes more valuable than money. I have enough money to fix lots of things myself, but I don't have the time and I'm too cheap to pay a company for something i could do myself.
 
Rates & Taxes you can work out yourself from the purchase price.

Don’t for a second believe the crap listed on the ad because that’s based on the current value which instantly goes up when you buy it and if it’s an older house might even be double it’s previous selling/valuation price.

If you want to go Solar and you are buying a house now it would be silly to not just load it up on your home loan and have a (near) static expense for the next decade or more. Rental just doesn’t make sense in my mind if you are about to get a home loan and access to money.

Some financial advice on top, don’t overextend yourself to the exact 30% of your income the bank is legally allowed to make your instalment.

Instead buy something coming in at 20-25% of your affordability, especially since it’s your first home and let some of the nice to haves go for now.

Immediately start paying it as if you had gotten the 30% loan and statically set your debit order well above what you must pay.

Not only will you get used to it and build a buffer you’ll also never feel the interest rate changes.

Then start saving every extra dime you get inside your home loan and pay that thing off as quickly as possible by offsetting the interest.
 
Last edited:
Foxhound5366 said:
*yawn* So your salary hasn't kept up with inflation and interest rate changes? I'm so sorry you're in a low-paying career path. Maybe your next job will be better? I know my current salary is 17x higher than it was when I started, so I'd say I have some reason to be moderately optimistic about my future earnings.

As for the rest of the 'oh no the sky is falling' "advice", no thank you. It's "advice" like that which paralyses so many people into never acting and just renting for the rest of their life. Or god forbid they dare live a little, because they're so desperate to save.
Click to expand...
Oh dear me...so typical. Doesn't like the advice and responds by lashing out and attempting insults.

"low paying career path"...I built my own company from scratch and gave it to my staff when I emigrated a year ago. I'm in my very early 50's and semi-retired, meaning I work when I get bored.

You're buying your first house...I've bought and sold three while living in SA. You're asking for garden services prices for your "budget" but get stroppy when people give you REAL advice. The same advice any bond originator or financial advisor would also give you: the basics of having a cushion/safety net when buying a house.

This is logical economic advice, based on facts...definitely not "the sky is falling" advice.

Also the fact that you equate saving to being desperate, just shows how financially and economically immature you seem to be...but then again your questions in your OP was already a sign of that.

Obviously you've been renting and now got that cute little raise and crunched some numbers with the wife and decided this is it!! We can buy a house!! We have finally grown up!!

The fact that you have to ask those questions on a forum, proves you cannot afford a house.

PS> People that started at a R1000 per month and now earn R17k per month 10 years later, salaries also increased 17x...just saying.

So I hope you go for it. Remember to lie re. your income on your Ooba ( what a joke ) application so you get that maximum bond you can "afford".

You'll be the first one crying here when the rates go up again.

As you were....
 
D said:
... hardships on its way, barrelling down on you:


www.moneyweb.co.za

Interest rates are up 325bps this year; how this affects your debt

Infographic: How 2022's cumulative rate hikes affect bond-, car- and credit card repayments.
www.moneyweb.co.za www.moneyweb.co.za
Click to expand...
No no...don't come here with facts! This is just "the sky is falling" nonsense and saving is for those that are desperate.

People that want to "live a little" buy houses.

:rolleyes:
 
TheMightyQuinn said:
Oh dear me...so typical. Doesn't like the advice and responds by lashing out and attempting insults.

"low paying career path"...I built my own company from scratch and gave it to my staff when I emigrated a year ago. I'm in my very early 50's and semi-retired, meaning I work when I get bored.

You're buying your first house...I've bought and sold three while living in SA. You're asking for garden services prices for your "budget" but get stroppy when people give you REAL advice. The same advice any bond originator or financial advisor would also give you: the basics of having a cushion/safety net when buying a house.

This is logical economic advice, based on facts...definitely not "the sky is falling" advice.

Also the fact that you equate saving to being desperate, just shows how financially and economically immature you seem to be...but then again your questions in your OP was already a sign of that.

Obviously you've been renting and now got that cute little raise and crunched some numbers with the wife and decided this is it!! We can buy a house!! We have finally grown up!!

The fact that you have to ask those questions on a forum, proves you cannot afford a house.

PS> People that started at a R1000 per month and now earn R17k per month 10 years later, salaries also increased 17x...just saying.

So I hope you go for it. Remember to lie re. your income on your Ooba ( what a joke ) application so you get that maximum bond you can "afford".

You'll be the first one crying here when the rates go up again.

As you were....
Click to expand...
Thanks dude, see I knew that was your attitude from the start. I was quite clear that I’m coming from a place of buying my first home, and I’m super-stoked about that. You’re not in the same place, but you might still have given practical relevant local advice … instead you gave lala-land advice suited to someone in your situation (which is not enjoyed by more than a fraction of a percentage point of South Africans). So if you don’t mind, you can go hang out where the fortunate people discuss how to blow their money, and I’ll ask for practical “immature” advice about maintaining gardens and security and insurance and rates ;) As you were.
 
D said:
And as an added bonus - those two news articles are about the situations in 2021 and 2022 ... and we all know that 2023 has already had its share of interest rate hikes and inflation. The recession has just started ...
Click to expand...
Thanks chicken little. Let me know when the sky stops falling. Imagine the people in 1994 swearing we shouldn’t buy homes because South Africa was gonna destroy itself, and yet more than twenty years on all those home buyers have paid off their bonds. I don’t think there’s ever a “good” time to buy on an investment so long-term, you just gotta weather the storms.
 
All I'm saying is, whatever the numbers are, you've got to add a percentage on top of the grand totals, otherwise you could be blindsided - and sooner than later, due to the current circumstances ...
 
Foxhound5366 said:
Thanks chicken little. Let me know when the sky stops falling. Imagine the people in 1994 swearing we shouldn’t buy homes because South Africa was gonna destroy itself, and yet more than twenty years on all those home buyers have paid off their bonds. I don’t think there’s ever a “good” time to buy on an investment so long-term, you just gotta weather the storms.
Click to expand...

When is a good time to buy? YESTERDAY!
 
Foxhound5366 said:
Thanks dude, see I knew that was your attitude from the start. I was quite clear that I’m coming from a place of buying my first home, and I’m super-stoked about that. You’re not in the same place, but you might still have given practical relevant local advice … instead you gave lala-land advice suited to someone in your situation (which is not enjoyed by more than a fraction of a percentage point of South Africans). So if you don’t mind, you can go hang out where the fortunate people discuss how to blow their money, and I’ll ask for practical “immature” advice about maintaining gardens and security and insurance and rates ;) As you were.
Click to expand...
Volatile interest rates and ever increasing inflation is NOT relevant "local" advice?

YOU are the one living in lala-land. We will see where your breathless enthusiasm gets you when you suddenly cannot pay your bond.

I'm sure your bank will be very interested in your "let's go for it" and "saving is for the desperate" views.

Your aggressive comments just shows how nervous and scared you are re. this huge step...I bet your hands are trembling when you type...

Stop lashing out and start listening to the people that have already done what you want to do.

Good advice is rarely the advice we WANT to hear.
 
D said:
And as an added bonus - those two news articles are about the situations in 2021 and 2022 ... and we all know that 2023 has already had its share of interest rate hikes and inflation. The recession has just started ...
Click to expand...
I also wonder if Ooba told him what his transfer costs will be, based on the house price? All required in cash of course, since 100% bonds are a thing of the past.

Tsk tsk....
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X