While buying a home, you need to keep several things in mind regarding financing. Of that the most important aspect is that of arranging a loan from a bank or a financial institution to pay the amount for your home. The main cost incurred on you, if you take a home loan, would be the interest rate. The interest is the money you pay the bank for borrowing the money (loan) for your home. There are additional costs that you need to pay to the bank, while availing a home loan, other than the interest. Here is a brief guideline on some of them.

In order to get approval from any bank for home loan, you need to meet a condition. That is, you need to pay some minimum amount before you take the loan and the amount will be based on the loan you take and securities you provide.

The purchase of a house means paying the revenue department a tax that needs to be registered. If it’s just the land, you merely pay a transfer duty on its value. Both the land and the building’s value must be considered otherwise.

That’s just should you need to get into your new house prior to finishing the necessary registration process. That would mean that you need to pay the seller rent until the registration has been completed.

If you decide to buy a property in your name, then you should be aware of the formalities for registration. During registration you have to pay a number of fees. All these fees depends on the rate of the property, which you have decided to buy. Among the fees is the conveyance fee which you have to pay to the attorney .Then there is another fee you have to pay to some office works. Again some other costs which come under municipal rate that paid to local authority. After the payment of all these fees the property will be transferred and registered in your name.

These contain valuation fees, interim interest and bond beginning fee. A valuation allowance is generally given to a building inspector or appraiser to assess the value of the property and determines if they are consistent with the loan amount requested. There is a bond initiation fee of the bank as a single payment for organizational costs. Then you may want to use a home insurance for the registration of mortgage credit. In fact, some banks even insist on this requirement as a condition for taking the loan. The other type of insurance that banks insist on a borrower’s life insurance. This is basically an extra security to the family of the borrower in case of an unexpected opportunity during the loan period.

Prior to venturing into the market looking for a secure home loan, it is always advisable to be aware of the total cost of the loan. By doing so, one can not only plan ahead of time but also be in control of the situation in a much better manner.

Read more on the different Nedbank bonds at mortgage SA.