Before shopping for a new home, you must determine how much house you can afford.
One way to start is to get a pre-approval from a bank, which will look at factors such as your income, debt and credit score to determine the loan amount you can afford.
A rule of thumb is that your monthly instalment should not exceed one-third of your monthly gross salary. If you have significant debt or other financial obligations, this will reduce the home loan amount you qualify for.
Working out how much you can afford when buying a property is simple. You can use a bond affordability calculator like this one https://www.bankwindhoek.com.na/Pages/Calchome.aspx to ascertain what you can afford when buying a home.
This calculator can give you a general idea of what amount of mortgage you can afford, the monthly instalment, and the interest added over the loan period. It is also important to remember that the pre-approval amount includes Transfer and Bond costs.
So, when shopping for a home, you need to look for something a little less than your pre-approved amount. Or be in a financial position to pay the Bond and Transfer costs in cash.
Also, do consider that transfer costs are less for properties registered as sectional title. If you are purchasing a property with a friend, investment partner, or spouse (not married in community of property), then you can purchase the property as a “one-half share in and to”, which can significantly reduce the transfer costs as these are calculated on the selling price.
So splitting the purchase price between the parties will reduce the transfer costs per buyer.
It is also important to remember that a monthly bond is not the only expense of buying a home. There are rates and taxes from the municipality, Electricity and Water, Insurance (home and life), security and maintenance.
Variables costs such as groceries, transport, and schooling can also significantly influence how much home you can afford.
For enquiries Text, Call or email #yourhomegirl Justina Hamupembe
Cell: +264812726001
Email: justina@chili.com.na
