You have found your dream home and everything seems perfect, now comes the crunch, How to come up with the cash for your new home? Buying a home is the biggest investment most of us will make during our lives, how to pay for this investment therefore requires some thought.

Depending on your financial situation you will finance your home in one of the following ways,

• Buy Cash
• Use a Government subsidy
• Use employer subsidy
• Finance with a mortgage loan/bond
• A combination of the above

Buying Your Home Cash

If you are financially independent and wealthy you can purchase your new home cash, unfortunately most of us are not in Bill Gates or Warren Buffet’s league, so please continue reading.

Using A Government Subsidy

The Government provides a grant to qualifying persons to assist them in financing a home. To qualify for a government subsidy you must meet the following requirements:

• Be a South African Citizen or enjoy permanent resident status
• Married or living with a partner, if you are single you need to prove that you have financial dependants
• Be over the age of 21 and competent to contract
• Monthly household income of less than R3 500 per month
• Be a first time property buyer

For more details on the Government’s housing subsidy please visit the Department of Housing Website - Click Here.

Employer Subsidy

Many companies still offer a housing subsidy to staff members, although not as prevalent these days many large organisations especially Government departments and parastatal provide this benefit. Speak to your Human Resources department to find out whether your employer offers a housing subsidy.

Mortgage Loans/Bonds

Most homes in South Africa are financed through mortgage loans/bonds provide by the major banks and other mortgage lending institutions in South Africa. A mortgage loan is a loan provide by a bank/mortgage lender and secured by fixed property. To apply for a mortgage loan you need to qualify in terms of the banks credit criteria and be able to afford the monthly repayments.

Purchasing a home is a big commitment and often a buyer might make use of a combination of these options , i.e.) cash and mortgage or mortgage and employer subsidy. If you are unable to afford or qualify for a mortgage loan at present you should read How to Qualify for A Mortgage Loan.