Buying a home in Botswana is worth it
Correspondent | Wednesday June 8, 2016 16:13
The security of owning the roof over your head, the feeling of contentment, satisfaction and fulfillment is the wish of most, if not all. Most of Botswana’s youth are still renting and are still finding it difficult to own their own home, however banks are trying to close the gap with bringing solutions that can see Batswana empowered towards home ownership.
Recently First National Bank Botswana (FNBB) launched a home loan mortgage solution of up to 105 percent cover for first time homebuyers and with no upfront deposit, which is the first of its kind in the Botswana market. This is a golden opportunity for Batswana to own their first home. “Home ownership is one of the best ways of creating wealth as the value of the asset increases over time, therefore if one maintains consistent repayments into their mortgage they are well positioned to take financial advantages of home ownership,” said FNBB Head of Home Loans, Kelebogile Shala Mading.
This could be a game changer for Batswana if utilised as owning a home is one of those monumental investments in a lifetime. One also has to manage that investment to the best of their ability. It requires a commitment of not only funds, but time and attention as well. There are cons that come with purchasing a home like maintenance, more responsibilities, home insurance, property taxes and the risk of foreclosure. But even with all of these factors, there are also a lot of benefits that comes with owning your first home. Purchasing a home is a smart financial move looking at the fact that;
You build equity
When owning a home you get the benefits of security, equity and potential growth in wealth over time, as you will realise that you have accumulated significant equity on the value of your home property. Equity is the amount of money you can sell your home for minus what you still owe.. Each month you make a mortgage payment, a portion of the amount you owe reduces and that reduction of your mortgage every month increases your equity.
You gain usage flexibility
Purchasing a home or house entitles you to be the legal owner of the house, which allows you to a greater freedom in its use without restrictions, which are normally enforced by landlord. This is being able to do whatever you wish to do that suits your style, like being able to have pets or host a braai with friends anytime on your property. When you rent you are subjected to your landlord ‘s rules but as an owner you can do almost anything.
Purchasing a home is cheaper than renting
Buying a home becomes cheaper over time when the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. At the end of the day you got to live at someplace, so instead of paying off your landlord’s home, better to pay off your own. The mortgage payment sometimes stays the same month after month, which can help you plan on your spending.
A Mortgage plays as a saving plan
Owning a home is a vehicle for forced savings and that’s a good thing. Paying that mortgage every month and reducing the amount of your principal mortgage is really like a savings plan. Each month you pay your mortgage you are building up your ownership interest.
You may be able to use your home as an investment
Being a homeowner you have the option to rent out the property, which enables you to generate income and this income can be put towards the home loan. What’s even better is that the value of your home appreciates overtime and if you decide to sell, you can earn profit off the sale. Your home is also a legacy, financial or otherwise for the future.
You gain a sense of belonging
Owning a home gives you a sense of permanence, a sense of belonging and a sense of personal satisfaction.. It also gives you and your family security and piece of mind knowing that you have a home to call your own. Homeownership develops a sense of community as you become attached to the neighbors and also develops the sense of roots of your family especially children as they become part of a community.
Owning your first home is a journey that can seem complex and some might think of putting off this chapter in life. However, with sound advise from a trusted and licensed partner such as your bank, a real estate consultant or a property lawyer, as well as your close family and friends who have journeyed before you; coming to own your first home can become a sweet reality to build on for many years to come. (FNB Botswana)