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Here's how you can get on the property ladder

Here's how you can get on the property ladder

Author: Pranil Maharaj
Date: 2018-05-18

There are great benefits to owning one's own home rather than renting and paying off someone else's bond.

Purchasing a home will most likely be the biggest investment decision anyone will ever make, and it's a decision that comes with specific financial obligations.

The key benefits to owning one's own home are that:

- In the medium to long term, costs related to homeownership will be lower than that of a rental unit.

- The home's value will in most instances grow over time.

- It provides independence and comfort for the whole family.

If the monthly payments related to two identical homes in the same area are compared, the first being a rental property, the other a home purchased with a loan, it is clear that if the person chooses to rent, the monthly rental will in most instances increase every year.

The home loan instalment will in the beginning be more than a rental payment and might, every now and again, increase or decrease as interest rates go up and down, but in the medium to long term a person will generally be paying far less per month should they purchase a home and not rent.

Even if a person is not planning to sell, lenders will more easily grant an additional loan if there is home equity value.

What about other benefits Owning your home will give you the freedom to decorate and repaint your home in a style that suits you. Every rand that you spend on improvements benefits you as it improves the value of your investment.

A home of your own also provides a place of comfort for you and your family, and gives you the flexibility to adapt your living space to your individual tastes and needs.

Now that you understand the significant benefits of homeownership, you will see that getting financially fit is not a burden, but rather the first step to financial well-being and peace of mind.