Buying a home is one of life’s most exciting milestones, but it also comes with challenges - from securing a bond to covering the hidden costs that often catch buyers off guard.
For most South Africans, the first hurdle is paperwork. Missing or incomplete documentation can delay - or even derail - a bond application. Lenders are meticulous when assessing applications, and delays often happen when applicants submit incomplete paperwork. In competitive markets, where multiple buyers may be interested in the same home, such delays could cost you the deal.
Documents you’ll need for a bond
While requirements differ between banks, buyers can expect to provide:
- Proof of identity (certified ID or passport, plus marriage documents if applicable)
- Proof of income (recent payslips or, for the self-employed, audited financials and bank statements)
- Bank statements (3-6 months)
- Proof of residence (utility bill or lease agreement)
- Tax documentation (IRP5 or SARS certificates)
- Offer to purchase and property valuation (if already signed)
- Other supporting documents (divorce decree, antenuptial contract, proof of additional income, etc.)
Getting bond pre-approval is one of the smartest steps buyers can take. It not only clarifies your budget but also gives sellers confidence in your ability to secure financing quickly.
Hidden costs buyers often overlook
Even once financing is secured, the costs don’t stop at the purchase price. “Levies, municipal rates and taxes, electricity, and even home security can add up.
Other once-off and recurring expenses include:
- Deposit requirements (banks rarely grant 100% bonds)
- Bond registration costs (e.g., ±R25 600 on a R1m property)
- Transfer costs (±R27 700 on a R1m property)
- Bond initiation fees (±R5 985, depending on the bank)
- Insurance (life insurance may be required; homeowners’ insurance is compulsory, and contents insurance is strongly advised)
Planning for success
Online calculators can help estimate bond repayments, attorney fees, and affordability. For instance, on a R1 million property with a R200 000 deposit at 10% interest over 20 years, monthly payments come to around R7 720, plus once-off costs exceeding R59 000.
Unforeseen events, such as the death of a spouse, can put households at risk. Life cover tied to your bond can prevent families from being forced to sell their home under financial pressure.
Tips for a seamless application process:
- Stay organised: Keep digital and hard copies of all documents ready.
- Check your credit score: A strong score improves approval chances and interest rates.
- Avoid new debt: Keep your debt-to-income ratio low during the application.
- Consider a bond originator: They can apply to multiple banks and negotiate better terms.
- Plan for ongoing costs: Budget for levies, rates, utilities, and insurance.
Buying a home doesn’t have to be overwhelming - but it does require preparation. By gathering the right paperwork, understanding the full scope of costs, and securing pre-approval, you’ll be in a stronger position to purchase with confidence and avoid nasty financial surprises.
