The Advantages Of Home Ownership

Buying a house is exhilarating and it’s also one of life’s greatest accomplishments.The advantages of home ownership go beyond financial gain. Being a homeowner is a success and an investment in the future that offers stability and security.

According to South Africa’s annual General Household Survey for 2020, in South Africa 63.5% of households live in unbonded homes that they own. 7.7% are still paying off their bonds.

Although purchasing a home may seem like a daunting task, there are several advantages to home ownership that make the experience worthwhile and enhance your quality of life. This article outlines the advantages of home ownership in South Africa and why it pays to own a property rather than rent.

Stability and Predictability

Renting is less stable than home ownership. The possibility of a landlord refusing to renew a lease is not a concern when you own the home. Renters often have to hustle to find new housing due to unforeseen circumstances.

Control your Living Expenses

In addition, owning a property can be less expensive because it offers the predictability that renting does not. When renting, tenants are at the whim of their landlords, who may increase the rent. Having a home loan makes it easier to plan, budget, and invest for the future, as you can depend on those bond repayments over the term of your loan. Note to the reader: Although interest rates might be variable, having a home loan may make it easier to plan.

Owning Property is a Form of Wealth

The most valuable asset you can own is your home. Additionally, its value will rise progressively over time. Once the property is paid for, you will always have a place to live, and you will be able to include it in your estate, giving your heirs or beneficiaries a fiscal advantage in life. According to cnbc.com owning a home affords you much more than just a roof over your head. One of the most reliable methods to create a solid financial foundation for future generations is to buy a home. This is an essential first step in creating generational wealth.

Autonomy

Although owning a home has many financial advantages, home owners can have more freedom and autonomy. If you are the owner of your home, you can make changes in accordance with Municipal bylaws, and estate and housing complex regulations. When it comes to landscaping, painting, appliances, and other such matters, you have more autonomy than someone who rents. When you rent a property, these decisions are up to the property owner.

Long Term Investment

Owning a home can be a good investment. If you’ve found your ideal home: congratulations. Consider the fact that if you rent for the same period of time you do not have an investment. In contrast, homeowners reduce their principle and increase their equity with each home loan payment, thereby creating a forced savings program. Making additional payments might help you save money faster, lower the interest you pay on your home loan and maybe even enable you to pay it off early. Note to the reader: while you will not lower the interest rate, additional payments will reduce the amount of interest owed.

You Can Draw From Home Equity

The term “equity” describes the discrepancy between the market value of the property and the balance owed on your bond.

You can use this equity as security for further loans. If you need to cover a significant expense, such home renovations, you may have access to a lump sum of cash. The home’s equity acts as security for the lender. The combined loan-to-value (CLTV) ratio, which ranges from 80% to 90% of the home’s appraised value, may be used in part to determine how much a homeowner is permitted to borrow. Of course, the borrower’s credit rating and payment history also affect the loan’s principal and interest rate.

If the advantages of home ownership listed above are enough to convince you to become a homeowner and to start enjoying the independence, security and stability you gain when owning property, the first step is to talk to a property lawyer and discuss your options. It is important to make sure you are ready for the responsibility, both financially and mentally, but you can begin the exciting and rewarding journey of a lifelong investment in the property market.

Do you need a conveyancer? Contact AWD Law for professional property advice before signing your Offer to Purchase.

Kindly be advised that AWD Law does not enter into litigation on behalf of clients. Our conveyancers specialise exclusively in the development of vacant land, property transfers, bond registrations, administration of deceased estates and notarial practice. Should you require assistance with a litigation, kindly contact The Legal Practice Council.