Becoming a homeowner – It doesn’t just have to be a dream

Becoming a homeowner – It doesn’t just have to be a dream

Favourable interest rates during the Covid pandemic has made a significant impact on the affordable housing market.

Author: Tansley Williams

Favourable interest rates during the Covid pandemic has made a significant impact on the affordable housing market. This market, which previously found it difficult to purchase property, now have the opportunity to become proud home owners. In addition to favourable interest rates, there are also options available to first time home buyers which would assist them in entering the property market.

  1. FLISP SUBSIDY

FLISP is a government subsidy available to first time home buyers. This subsidy is designed to help low to medium-income earners. Originally, FLISP only provided for those who earned below R15 000. However, since July 2018 FLISP assists first time home buyers earning between R3 501 and R22 000. To further qualify for this subsidy, you must be a South African citizen above 18 years old. You must have secured a home loan before making the application for FLISP.  

HOW BIG IS THE SUBSIDY?

The amount that you receive in terms of this grant depends on your income. The lower your gross income, the bigger your subsidy will be. The qualifying amount varies between R27 960 and R121 626 (as per the FLISP Subsidy Quantum).

HOW CAN THE FLISP SUBSIDY BE USED?

You can use the FLISP subsidy to assist in securing a deposit for a property. If you get a 100% bond and thus are not required to pay a deposit, FLISP pays the amount directly into your bond giving you a head start at paying off your home loan. FLISP also assists in paying the costs of the purchase in terms of  transfer and bond fees.

HOW TO APPLY FOR THE FLISP SUBSIDY

Once you have met all the criteria for applying for FLISP as discussed above, you can apply at your local Department of Human Settlement office, or by contacting the National Housing Finance Corporation. Should you require any assistance in the application process, please contact our offices.

  • THE 105% HOME LOAN

Some banks have introduced the 105% home loan which is aimed at first-time home buyers and properties purchased for less than a value as determined by the relevant financial institution. The 105% home loan does not just remove the need to pay a deposit, but also covers up to 5% of the costs involved in purchasing a property (the bond and transfer fees). The benefit of this is that first-time home buyers do not need to pay these fees upfront. One does however need to consider that this means higher monthly bond repayments with more interest payable over the term of the loan. Either way, now is the time to enter the property market and to take advantage of the low interest rates. These options make it possible to become a home owner and not run the risk of being caught in a rent trap forever.

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