I was 31 when I decided to buy a home, and although I was committed to owning property of my own one day, browsing Property24 was a depressing experience and I was spending as much as I earned every month.
In 2018, a one-bedroom apartment in Cape Town costs upwards of R1m. That’s about R10 000 in monthly bond repayments, then another R2 000 to R3 000 in rates and levies.
Even with my steady job and an average income, I didn’t earn enough to cover the costs of a 20-year bond on a one-bedroom home in the city. I had to get realistic about what I could buy.
Bond repayments along with rates, levies, water, electricity, insurance and maintenance all added up to a lot of my income - a lot more than I was paying in rent - and it still wasn’t near enough to buy a house.
But I was curious to see if this dream was possible. I started by working out how much I could afford every month, and thanks to online bond calculators I had a good idea of what the bank would lend me.
Online Home Loan Bond Calculators will provide you with an estimate of expenses including initial payments such as transfer costs, bond costs, initiation fees and transfer duties. This is only an estimate and not a promise that you will be granted a bond for this amount, or even at all.
The two figures, what I could afford and what the bank would lend me, didn’t match up. The banks provide an estimate loan based on your overall income and in my case, the bank would have lent me more than I was actually able to pay back every month.
I didn’t want to struggle to repay my bond, so I took about 30% off that amount and set to work finding a property that fell into this price range. I also started paying attention to real estate trends.
The conundrum is that you need credit to get credit, so I opened an Edgars account. I soon found I enjoyed shopping on credit and opened several more accounts. It took me a longer than it should have for me to realise I was shopping myself into debt, and was now only going backwards.
It was time to commit, to do what I had to do to reach my dream. It wasn’t the first time, or the last: I recommitted to my goals on a regular basis throughout the whole process.
I had grand designs on a home with sweeping views and a walk-in closet, but my salary band had me viewing converted garages far from town - and far from my dream.
This made it harder to commit to saving, but because I had been watching the market I noticed a small shift in prices. Properties I had my eye on weren’t selling, and were then being marked down. Maybe something would slip into my price bracket soon.
These falling prices gave me the motivation I needed to start really saving hard. I spent a year paying off debt and closing accounts, and saving towards a deposit.
Banks are more likely to grant a home loan if the buyer has a deposit saved up. Property24 advises an amount of about 8% of the property value. Banks sometimes offer 100% loans, but with a deposit your bond application is more likely to be accepted. The bigger the deposit, the lower the monthly instalments will be and the less interest you’ll repay over the loan period.
I took on the challenge with all I had. I had worked out how much I’d need and it was a lot, so I took some drastic steps to save.
One of these was moving home. This was an excellent way to save money, but came with many drawbacks. My commute went from 20 minutes to 2 hours, among other things. I wanted to buy a house, but I didn’t want to be miserable doing it.
Three months later I moved back to the city, renting a tiny, cheap room in a house above the city. I walked to work and saved every cent I could. I cancelled my gym contract, experimented with vegetarianism, walked everywhere possible and tried very hard to enjoy a capsule wardrobe. I even got a weekend job at a bookshop for a while.
I also motivated for an increase at work, and after a few months it was granted. This helped me to also set up a savings account for the lawyer’s fees, which include bond registration and transfer costs.
I knew being frugal wasn’t going to be forever, which helped me through the harder times. I browsed furnishings and décor sites, imagining all my #homesweethome Instagram pics. The frugal lifestyle was starting to pay off: my savings were looking healthy, property prices were falling and I felt I would soon find my new home. I was ready, but my credit record was still a mystery to me.
Credit checks can be done for free through companies such as Transunion.co.za or mycreditcheck.co.za. By law, you are entitled to one free credit check per year. Your credit record tracks everything from accounts you open to payments you skip, and includes judgments taken against you.
I didn’t think it would be a big deal. I had always repaid any accounts in good time, but when I finally checked my credit record I found I had been penalised for missing payments on a cell phone contract.
Having never signed a phone contract I was shocked. After several calls and emails, it turned out that my identity had been stolen and used to buy a phone contract which was then defaulted on. With a black mark on my credit record the bank would never give me a home loan.
It took me over six weeks to rectify this error, and it was extremely time consuming and difficult to do. I suggest anyone wanting to buy a property check their credit record right away, and then keep an eye on it.
The very same day that I received confirmation that my credit record had been corrected and I was free to confidently apply for credit once more, I found the apartment that was to become my home.
I had eyed this particular city centre block for months, and was notified that a small studio apartment had just been discounted.
I immediately made an appointment to view it, as soon as I met the estate agent I asked about rates and levies - before I even walked into the apartment. But when I did, I knew could afford to make an offer on the property. The rest, as they say, is history.
I was 33 when I accepted the keys to my very own apartment in the heart of Cape Town’s CBD. The process took just under two years of saving and commitment and while my studio home doesn’t have a walk-in closet, it does have a beautiful view of Table Mountain, a secure parking bay and, best of all, a bond that I can afford.
Sign up to W24's newsletters so you don't miss out on any of our hot stories and giveaways.