5 WAYS TO OVERCOME FIRST-TIME BUYER JITTERS

Purchasing your first home is a big milestone. It’s not uncommon to experience anxiety after signing the OTP and realizing that you’ve now locked yourself into millions of Rands in debt. As one of the biggest purchases you can ever make, it’s entirely normal to experience this form of buyer’s regret. To help you overcome your anxieties, below are a few easy ways to refocus your perspective and ease any first-time buyer jitters you may have:

Focus on investment not debt
Don’t make the mistake of thinking about the purchase solely in terms of the amount of debt you’ve taken on. Real estate is an appreciating asset. Instead of viewing it as an insurmountable mountain of debt, consider each repayment towards your home loan as an investment towards future wealth.

Budgeting reduces jitters
One of the biggest concerns many first-time buyers face is that they will fall behind on repayments. The best way to eliminate this concern is to go over your finances and create a budget that you can stick to so that this never becomes a justifiable concern. Take the time to create a realistic and accurate budget so that you know you can afford to keep up with the repayments. Once you have reassured yourself that you can afford your purchase, you should begin to feel a lot calmer.

Predict the unpredictable
There are some things that are out of your control that could affect your ability to make your monthly repayment. For example, interest rates can change every two months when the MPC meets. The best way to avoid unnecessary stress around this is to purchase within your means and to leave room for roughly a 0.25% increase. Historically, the MPC does not hike interest rates by more than 0.25% points at any given meeting. If there is a series of interest rate hikes, these usually only happen gradually which gives you enough time to plan and adjust your budget as necessary. 

Create an emergency fund
Having a contingency fund is vital. The extra cash will put your mind at ease about your purchase and aid you in dealing with the unexpected. Things often break or suddenly need replacing, which can put financial strain on a household. You may even find yourself temporarily unemployed during the span of your home loan. Having roughly around two months’ salary set aside in a tax-free emergency savings fund can lessen your anxiety around your bond repayments.   

Remember the pros to homeownership
Once you’ve created a solid plan of action, it’s best to put these thoughts out of your mind and focus your energy on the excitement of purchasing your first home. You can distract yourself from unnecessary worry by focusing on all the benefits of owning your first home, like the fact that you can now hang pictures without getting a landlord’s approval and you won’t have to worry about unmanageable rental increases.

First-time buyers should seek professional advice
If thinking of these benefits doesn’t work, then maybe reaching out to a real estate professional will help ease your worries. Their years of experience and knowledge of the industry could very well restore your confidence in your investment. They’ll also be able to provide a value estimate on your property should you decide to sell your home or rent it out in the future.