Securing your family's future: The journey to home ownership with Momentum Velocity Club

In life's journey, few milestones carry as much emotional and financial weight as buying a home. One of the reasons for that is that buying a house is not just about acquiring property; it's about creating a safe haven for your family, a legacy that transcends generations.

At Velocity Club, we understand that it's more than just a home; it's a cornerstone of your family's future.

We know that many of you are juggling family responsibilities with the demands of your career. In these circumstances, the dream of home ownership can often feel just out of reach. But today, we're here to tell you that with the right guidance and planning, it's closer than you think.

This is where Momentum Velocity Club steps in.
Our expert services are tailored to assist you in understanding and managing the financial aspects of buying a home.

We offer personalised financial plans and expert advice, helping you to navigate the complexities of home purchasing as part of your bigger financial plan and - importantly - the hidden expenses of home ownership, including the repayment costs.

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Understanding the costs

Buying a home involves various costs. Some are obvious, while some are less well-known. To avoid any unexpected financial surprises in the process, being informed is the first step to successful home ownership and as usual, we're here to help!

Expect to pay a number of expenses beyond the price of the property, including transfer fees and bond registration costs.

What are transfer fees?

These are the legal and other fees that a buyer pays to a conveyancing attorney to transfer the property from the seller's name and the transfer duty paid to SARS (which is a type of tax you pay for buying property). Interestingly, properties below R1,1 million do not pay transfer fees*.
*as of January 2024.

What are bond registration fees?

There are also legal and other fees payable should you want to use a mortgage bond to help you buy a property. The biggest fee here is attorney fees to register the bond on the property.

Similarly, owning a home comes with a number of expenses, including rates and utilities, insurance, maintenance and repairs, and security costs.

Home purchase costs

To give you an idea of what to expect when buying a house with the help of a bond, we calculated the costs of buying a R1 600 000 home.

For this purchase, you will want to save up to a 10% deposit, totalling R160 000, to help get the monthly repayment as low as possible. On a bond of R1 440 000 (taking into account the deposit you will pay), repaid over 20 years, you would pay R15 605 per month or R187 260 annually (based on a prime rate of 11.75% as of January 2024).

Remember, the higher the initial deposit, the lower the bond you need and, therefore, the lower your monthly repayment.

The various expenses involved with the purchase, including transfer and bond fees, would also need to be paid. In this case, we expect those to total R91 635, meaning you would have a total once-off expenses bill of R251 635 (i.e. including the 10% deposit) that you will need to save up in cash for before you can go shopping for that dream home.

To help you reach that number, we recommend setting aside a portion of your monthly income and depositing it into a separate savings account.

All of this planning can be discussed with your Velocity Club Financial Consultant when you book a complimentary session. This session will help you better understand your current financial situation and help guide you towards where you really want to be. Book a consultation today.

Home ownership costs

You've bought the house, the bond is registered in your name, and you've received the keys. With the once-off costs behind you, it's now time to start thinking about the cost of owning your home.

Home ownership costs consist of monthly expenses and ad-hoc expenses.

Monthly expenses include your:

• Property rates and municipal services (sewerage, refusal removal) costs
  
• Utilities (water and electricity)
  
• Home and building insurance cost
  
• Security costs

For this exercise, we've assumed the monthly costs for those items to be as follows:

• Rates: R4 000 - R8 000
  
• Utilities: R1 500 - R3 000
  
• Insurance: R1 000
  
• Security: R500 - R1 000

Total annual ownership costs: R18 640 - R23 640.

Keep in mind that these costs will vary from property to property, different areas and environmental factors.

Finally, you have ad-hoc expenses, which mainly relate to maintenance. These costs typically total 1% to 3% of the home's value per year, working out to R30 000 on average per year. To fund this, we highly recommend that you set money aside every month for home maintenance to avoid financial strain when repairs become necessary.

Securing your legacy through estate planning

For many of our clients, buying a home is more than a financial investment; it's about creating a legacy for their children. For some, that legacy is something they perhaps never had. That's why we integrate estate planning into our services.

Understanding how your home fits into your broader estate plan is crucial even for existing home owners. It's about securing your family's future ensuring your legacy is protected and passed on according to your wishes. Speak to us to find out how we can assist with your estate planning.

Personalised financial guidance

At Velocity Club, we believe in a personalised approach. Every family, every dream, and every financial situation is unique. Our complimentary consultation offers you the opportunity to discuss your individual needs and goals with our experts. We'll help you develop a personalised plan that aligns with your vision of home ownership and family security.

Speak to a Velocity Club financial adviser

The journey to home ownership, filled with hopes and challenges, is a significant step towards securing your family's future. It's a path best navigated with a partner who understands your dreams and the practical steps to achieve them. Book a complimentary consultation with a Velocity Club financial adviser today and take the first step towards turning your dream home into a reality.

Conclusion

Your home is more than just a place to live; it's a safe space and the heart of your family's legacy. With Velocity Club, you can embark on a journey of informed, supported, and successful home purchasing and ownership. Let's help you build not just a house but a home filled with love, memories, and security for generations to come.

PS. We recently published a helpful Infographic on this topic, which you can find on our Instagram account. While you're there, if you aren't already following our account, how about hitting that Follow button?