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Common mistakes homeowners make

Johannesburg - Not understanding affordability is one of the most common mistakes people make when buying a home, according to Nedbank’s homeloans head of sales and client value management Timothy Akinnusi.

Akinnusi said in a video interview with Fin24 that some people simply don’t understand the level of expenses they would need to incur, over-extending themselves and not leaving a contingency for a rainy day.

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“Looking at some costs from an acquisition point of view, you would need to look at the cost of transfer, the cost of attorney registration and also the cost of insurance on a house.

“If its sectional title that would be part of your rates and taxes and levies and if it’s a full title you would need to take out a homeowners cover for that,” he said.

These are additional costs that customers don’t always take into consideration when buying their homes. Other costs that are often not taken into account relates to maintenance.

“When you acquire a home loan you acquire it over a twenty year period, in most cases you would probably have your house for seven to eight years but that is a long time and a lot of things can happen over an eight year period.”

Akinnusi said home buyers should have some level of disposable income left as opposed to using it all to finance the bond for unexpected things like damages.

Another key thing, he said, is around how to get away from high interest payments, the ability to put more into a home loan over and above the contractual repayment obligations.

“I think it’s quite important to do that to reduce the costs from a repayment view.”

He said at times of distress, consumers can contact their bank.

“Your loans could be re-structured if you do get into financial difficulty and you believe that you can’t keep up with the current repayments.

“It’s never in our best interests to repossess your home so it’s always in both parties best interest to make sure that you are able to ride out any tough times that you might find yourself in,” Akinnusi said.

- Fin24

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