Buying a home when you can’t afford a deposit
Most of us dream of owning our own home. Not only does it give you a secure place to live, but it’s also an excellent investment opportunity. Getting to the stage of actually purchasing this home, however, can be daunting.
One of the most common challenges when buying your first home is acquiring the necessary capital to put down a deposit. With ever-rising costs in our everyday lives, it may seem near-impossible to put money aside for a deposit. The good news is that it is possible to acquire a 100% home loan that requires no deposit.
First things first, let’s talk about what exactly a 100% home loan is.
By nature, a 100% home loan is a loan that covers the entire price of your home – including the deposit. It does not, however, cover additional costs. Depending on your choice of property and individual requirements, these costs include transfer fees, VAT (if you’re purchasing a new home from a developer), homeowners’ insurance, administration fees, and bond protection. You can read more about these costs and how best to prepare for them here.
How do I know if I qualify for a 100% home loan?
Before getting approved for any loan, you’ll need to undergo an affordability assessment. This is mandated by the National Credit Act and is there to help you avoid accumulating debt you can’t afford to pay off. To get an estimate of how much you can afford to lend, use our free Affordability Calculator.
This is a crucial first step in the home buying journey. Before you can start viewing properties, you need to know what your budget will be. When starting your hunt for a property, it’s important to keep future costs in mind. Maintenance like painting or renovating and monthly utility bills and levies can quickly add up and cause financial strain.
These are all factors to take into consideration when deciding how much you want to spend on a home.
Buying your first home is an excellent way to provide security for yourself and your family, but it’s important to be vigilant about what you can truly afford. Contact SA Home Loans today to find out more about your options when it comes to buying a home without a deposit.
Source: SA Home Loans
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