5 TIPS FOR FIRST-GENERATION HOMEOWNERS
Homeownership has always been a dream that many aspire to achieve, especially among those who will be the first in their family to own a home despite their parents being unable to provide financial support through intergenerational wealth. Though first-generation homeowners tend to face a far more challenging journey into homeownership, there are a few tips that can help them achieve their homeowning dreams…
#1: Tips for securing finances
Entering the real estate market without having anyone to stand as surety for debt or to help carry the costs of living if you hit troubled waters is no easy feat. When buying a home, you’re committing to decades of financial liability. That is why it’s vital to evaluate your finances to understand what you can afford before entering the housing market. Do an in-depth evaluation of your finances paying close attention to your income vs. expenses to create a basic budget. It’s also advised to spend below your budget to allow yourself some breathing room for other homeownership costs that you may incur. To make things somewhat more manageable, those with a household income of between R3 501 to R22 000 could apply for a housing subsidy through the FLISP programme, which is designed for first-time homebuyers to assist with purchasing a home.
#2: Get pre-approved first
One thing that is guaranteed to help first-generation buyers is getting your bond pre-approved from the bank. This will allow you to narrow your property search to homes within your budget. As a bonus, pre-approval is also seen as a good sign to the sellers, so your chances of having your offer accepted would most likely increase.
#3 Create a projected homeowner’s budget
As a first-generation homeowner, you might not be aware of all the related expenses that come with owning a home. Owning a home involves more than just paying off your bond. You’d also need to budget for moving costs, homeowners’ insurance, utilities, rates, taxes, maintenance, and potential upgrades of the property. You should also have a contingency fund available to assist you with unexpected costs or emergency repairs that may occur after you’ve moved in.
#4 Get advice from a real estate professional
An overlooked aspect of first-generation homeownership is the lack of knowledge transfer from parent to child. Those who have grown up in homes where parents owned property are more likely to be familiar with some of the concepts around owning property. For those who are unfamiliar with homeownership, it could be helpful to chat with an agent from a reputable brand to get some free advice on the topic.
#5 Never give up on your homeowning dream
Even though buying your first home can seem overwhelming for first-generation home buyers, it’s important never to give up on your dreams of homeownership. Through careful spending and good saving habits, homeownership may well be within your grasp.