Every potential buyer should assess their financial situation carefully to ensure that they have the best chance of a successful bond application. We've put together some information about the costs involved in purchasing a property, which can be used as a guide.

Step 1: Clear as much debt as possible

Doing so before applying for a loan will help you to increase your credit score, which will in turn help you to secure a lower interest rate on your loan.

Step 2: Saving for a deposit is also ideal and will save you quite a bit of money in interest repayments.

Although there are 100% home loan options, especially for first-time buyers, the general guideline applies: The smaller the risk, the less interest will be charged. Financial institutions consider home loans to be less risky when a deposit is provided. Never underestimate the cost of interest, when applying for a home loan.

Step 3: Plan for the transfer and bond costs involved

TRANSFER COSTS:
Attorneys will be appointed by the property's seller in order to arrange the transfer of the property from the seller's name to the buyer's name. The attorneys will charge the buyer fees as mentioned below. They will also facilitate payment for the following costs:
Transfer duty
As of March 2020, any property above R1 million is subject to transfer duty. This is a tax paid by the seller to SARS in order to transfer the property into the new homeowner's name. This tax runs on a sliding scale and depends on the selling price of the house.
Conveyancing attorney fees
Attorney fees differ depending on the selling price and the attorney's firm. Ensure that you request a quote from the attorney assigned before proceeding with the transfer of the property.
Small fees  - these include deed office fees, postage, FICA, and other petties.

BOND COSTS:

Bond initiation fee
The bank will charge a fee to process the bond application. Some banks charge a flat rate while others base their fee on the size of your home loan.
Bond registration fee
Bond attorneys will need to be appointed by the buyer or the buyer's bank to register the bond at the deeds office.
Miscellaneous costs
These include postage, FICA, and other petties.

This is a general example of the transfer and registration costs you can expect to pay if purchasing a property for about R1.2 million rand.

Attorney fees	R 24 545
Transfer duty	R  6 000
Small fees	R  1 220
TRANSFER COSTS	R 32 865

 

Bond registration costs	R  6 145
Bond deeds office fees	R     438
Miscellaneous	R  1 100
BOND COSTS	R 7 683

 

ESTIMATED TRANSFER AND BOND COSTS ON A R1.2 MILLION  PROPERTY

R 40 548

 

Disclaimer: the above is simply an estimation to provide you with a guideline. It is in no way intended as a quote of any kind.