top of page
Pillars of Justice

Purchasing a home during periods of high-interest rates can be a bit tricky.

Purchasing a home during periods of high-interest rates can be a bit tricky, but with some strategic planning and professional advice, achieving homeownership remains a viable long-term investment. Adrian Goslett, the Regional Director and CEO of RE/MAX of Southern Africa, highlights that when interest rates are elevated, there's typically less competition among homebuyers. Consequently, sellers are often more inclined to accept offers below their asking price, especially when there's limited interest from qualified buyers.


However, the key challenge lies in ensuring that you can comfortably afford the home purchase. Here are some practical tips on how to navigate the homebuying process when interest rates are high:


1. **Save for a Bigger Down Payment:** High interest rates typically mean you'll qualify for a lower home finance amount. To bridge this gap, you'll need to save up a substantial down payment. While this may be challenging, there are ways to accumulate funds quickly. For instance, if your family owns two cars, consider selling one and directing the proceeds toward your home purchase. A larger down payment not only enhances affordability but also reduces the total loan amount, resulting in lower monthly installments.


2. **Compare Interest Rates:** Most financial institutions are willing to offer lower interest rates to individuals with excellent credit scores, which becomes especially important when interest rates are high. To secure the most favorable interest rate for your home loan, invest time in shopping around and obtaining quotes from different banks.


3. **Improve Your Credit Score:** If your credit score is less than stellar, take several months to work on enhancing it before embarking on your house-hunting journey. Prioritize paying down any high-interest debts to improve your overall financial well-being. Ensure that you make full, on-time payments for all your credit obligations, as any lapses can negatively impact your credit score.


In conclusion, Goslett advises potential buyers to remember that interest rates can fluctuate over time. This means they may increase further or decrease in the future. It's crucial to have a clear understanding of what you can genuinely afford. A general guideline is that your home loan should not exceed approximately 30% of your gross monthly income. Once you've determined this amount, reach out to your local RE/MAX agent to initiate your search for homes within your budget.




8 views0 comments

Comments


IMPORTANT NOTICE :

Criminal syndicates may attempt to induce you to make payments due to Gerhard Barnard Inc into bank accounts which do not belong to the firm and are controlled by criminals. These frauds are typically perpetrated using eMails or letters that appear materially identical to letters or eMails that may be sent to you by Gerhard Barnard Inc. Please take proper care in checking that these eMails do emanate from Gerhard Barnard Inc.

 

Before making any payment to Gerhard Barnard Inc please ensure that you verify that the account into which payment will be made is a legitimate bank account of Gerhard Barnard Inc.

 

If you are not certain of the correctness of the bank account you may contact Gerhard Barnard Inc and request to speak to the person attending to your matter. They will assist you in confirming the correct bank details.

 

Gerhard Barnard Inc will not advise of any change in bank details by way of an eMail or other electronic communication. If you should receive any communication of this nature please report it to the person attending to your matter.

Our Newsletters

Follow Us On:

  • Instagram
  • Youtube
  • LinkedIn
  • Facebook
  • Twitter

© 2023 by Marius Potgieter Powered and secured by Gerhard Barnard Inc Attorneys

bottom of page