Johannesburg – More and more South Africans are taking advantage of low-interest rates to buy houses, according to the Reserve Bank.
The central bank’s Financial Stability Review shows that the number of mortgage applications received and approved by banks has been unusually high in recent months.
“In the second half of 2020, mortgage credit applications increased to record highs and the share of applications being approved by banks also rose to unusually high levels.
While the approval rate has moderated to more normal levels since the start of 2021, the number of mortgage applications has remained above average.
“Demand for mortgage loans is also likely being driven by improved affordability in some segments of the market as interest rates have come down. This would explain the increased growth in house prices,” said the bank.
Masibulele Mandongana from the Transaction Support Centre gives consumers key insights into the most important things to know when buying a house.
Only work with registered estate agents
Estate agents are required by law to register with the Estate Agencies Affairs Board.
If you use an unregistered agent there is no formal channel for recourse should things go wrong.
Always sign a formal offer to purchase
Property cannot be legally sold in South Africa without a written agreement.
Before you sign the sale agreement, ask for the copy of the title deed to check that the person selling the property is indeed the owner.
Never pay cash directly to the seller
The risks of paying in cash include the seller not honouring the agreement; the seller’s family not honouring the agreement in a case of death; and last, the seller’s creditors may seize the property if they die and have large debt.
Ensure a lawyer assists with the formal transfer
Only a lawyer called a conveyancer can transfer property into someone’s name.
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