Reporter: Buying a home is a life-changing event for most people, and it can be quite complex when one is not sure where and how to start. We have Tim Akinnusi with us in the loft, who is the head of home loan sales and client value management at Nedbank Home Loans, to talk us through some of the key considerations that one has to look at when buying property. Welcome to the loft, Tim, happy to have you with us.When one is considering to buy a home for the first time, what should they be thinking about?
Tim: I think firstly, they need to understand their personal readiness. They need to look at their relationship with credit, because that is the first thing that banks would look at when you go to a bank for funding. How have you managed your ability to make repayments on small things like your credit cards, clothing accounts, etc? From there you you need to start to look at your affordability, because you need to look at what you can afford, not just in a short term but over a period of time. We have an affordability calculator that you could use to find that out. In essence it’s your expenses minus your surplus and that gives you a range of what you could afford. And thirdly, you need to start to look at how much savings that you’ve had because there’s some costs involved. The cost of initiating the loan, and obviously when you are in this dream home of yours, you then need to make sure that you can maintain it. Things like electricity bills, your levies, rates and taxes, etc. So that’s then key. Then lastly, your life stage. So what stage are you in your life? Because when you buy property you have to buy it for the correct life stage if it’s your primary unit. So if you’re a bachelor, you want to typically be looking at a bachelor pad or a one bedroom place to start off with. And kind of gauge, say you’re going to be in this house for a couple of years and if you’re looking to then settle down you may want to look for something slightly bigger. So consider your life stage and how soon you’re likely to evolve before then committing yourself to a property.
Reporter: Now, speaking of life stage, what about the house? What should be considered when you’re buying a house?
TIm: Yeah, so you could either buy a house in an estate or a standalone, which would imply that you’re buying in a sectional title if it’s an estate or a standalone that’s a full title. So I think key considerations would be things like security, amenities, where you work, where you socialise, and also what you’re looking to get out of the property. Is it your primary residence, or are you looking at it from an investment standpoint? Because that would determine whether or not you decide to personalise it or to keep it quite– I suppose quite classic.
Reporter: And what role does the bank play in this whole process and your relationship with your bank?
Tim: So as a bank, the role that we play is obviously to help you find the place. And part of the funding process is also about educating you to understand exactly what channels you can use to acquire a home loan, what costs you need to be looking at to consider. And then obviously as you go along, you can be a little more sophisticated in terms of your use of the place or in terms of your use of the home loan. You can either pre-pay into it– which is a good way to create a little bit of a slush fund for you whenever you need additional funding, and also when you eventually pay that off, hopefully the property has appreciated in value so that when you buy your next place you have a nice deposit to put down, which will help you manage the long term value and the rate that we give you on your next place.
Reporter: Wow, so how has Nedbank partnered continuously with home buyers in the past 20 years?
Tim: We’ve got a long history with being able to fund people’s homes, mainly South African homes. And for us, what we’ve tried to do over the last 20 years is constantly make sure that anybody who takes out a bond from us is able to sustain that and to ensure that this continues to be an asset for them over the long term. So part of our strategy is to create easy channels for people to get access to a bond. To create a lot of education around the various options they have for property. So they either can do a buy to let, you can either buy property for investment, or choose to build something. So we’ve tried to make sure that we cater for everybody’s needs at whatever life stage that they’re at at that point in time.