Avoid the stress and mistakes most homeowners must endure when they buy a home by educating yourself about the options and fees associated with home loans.

First-time buyer home loans: A loan in which borrowers finance more than the full value of the property, the intention being that they cover part of the loan’s cost with the loan itself. Along with a lack of deposit requirement, this eases the burden on new buyers and allows them to realistically enter the market.

The buyer picks the loan with a fixed rate and will pay for 1-2 years on interest, and it is slightly higher than the present leading rate so when rates decline, it will not be an adjusted rate.

Variable home loans: This type of loan begins with one interest rate, agreed upon between you and your lender. Then, if the prime interest rate increases or decreases, the interest rate on your loan will adjust accordingly. Obviously, this option is best in a declining interest rate environment.

Capped home loans: Buyers will only be able to receive the benefits of both the variable and fixed home loans, who meet the required qualification. Use this option caps to negotiate rate for a fixed period of time. you can also take advantage of decreasing interest rates which also safeguards you against raising interest rates. confirm if you can avail this option from your bank.

You should also take into consideration the costs of getting a home loan when you enter the market. Most buyers are not familiar with these costs and are often surprised to see how much they add up.

A minimum deposit amount should be paid to the lender if you are not a first-time buyer to apply for a home loan. The deposit amount is generally 20%, but it can also vary depending on the value of the property for which you are applying a home loan.

Dictated by the Law Society, transfer and registration fees go to the attorneys registering property and the mortgage bond on that property. More expensive properties earn higher fees, also known as conveyancing fees.

Deeds office levies and fees:the registration of possessions and other civil rights regarding immovable property are accountability of The Deeds office.The department of Land affairs is the main jurisdiction held by the government office

Rates and taxes: Before property can be transferred to your name, the rates due on the property must be paid in full for the financial year. As a buyer you will be responsible for a pro rated amount for the part of the year you will occupy the property. You will also be charged for a rates clearance fee certificate.

Some of the most important that has to be considered while owning a home are the cost of the property and the life insurance which adds up to the overall costs. Also the moving costs, water, electrical and the household costs should be calculated for budgeting.

Tom Martens is the marketing director for Homeloans-southafrica.co.za. South Arica’s leading Home-loans portal