Financial mistakes to avoid during the home buying process
Purchasing a home is one of the most significant financial milestones many will achieve in their lifetime. While saving for a deposit is an important first step, there are several other financial pitfalls that buyers need to be aware of before and during the home-buying process.
According to the experts, having savings set aside is only one part of the equation. Many prospective buyers unknowingly make financial missteps that can delay or derail their chances of securing a home loan. It’s important to enter the property market informed and financially prepared.”
Below are key financial mistakes to avoid when purchasing property in Namibia:
Neglecting your credit score
In Namibia, your credit score is a critical factor in determining whether a bank or financial institution will approve your home loan, and at what interest rate. Late payments on store cards, credit cards, or loans will negatively impact your score.
Pro Tip: Request a free credit report from a local credit bureau such as TransUnion Namibia. Review it for errors and make sure to settle or reduce existing debts. Ideally, keep revolving credit balances under 30% of their limits.
Here is our guide on your credit score and everything you need to know about keeping it healthy
Taking on new debt before applying for a home loan
Buying furniture, electronics, or even a new car on credit right before applying for a home loan can hurt your chances. New debts increase your debt-to-income ratio, which makes you appear riskier to lenders.
Did You Know? Even cash purchases over a certain threshold might raise questions during the bond approval process, especially if they involve large, unexplained withdrawals.
Underestimating the true cost of buying a home
Many first-time buyers focus only on the home loan repayments each month. But there are several other costs that come with property ownership in Namibia, including:
- Transfer duties (see table below for breakdown of transfer duties)
- Legal fees
- Bank initiation and admin charges
- Municipal service connection fees
- Property valuation costs
- Monthly levies if buying in a sectional title complex
Currently, transfer duties rates are applicable as follows:
| Amount (NAD) | Rate |
| Less than or equal to 1,100,000 | Exempt |
| 1,100,000 - 1,580,000 | 1% of the amount exceeding 1,580,000 |
| 1,580,000 - 3,150,000 | N$4800 + 5% of the amount exceeding 1,580,000 |
| 3,150,000 - 12,100,000 | N$ 83,300 + 8% of the amount exceeding 3,150,000 |
| > 12,100,000 | N$ 799,300 + 11% of the amount exceeding 12,100,000 |
Transfer duty is payable at 12% of the acquisition value where property is acquired by non-natural persons (a sliding scale applies to property purchases by natural persons). While it is normally payable by the buyer, the agreement for the sale of the property may determine the person liable to pay these costs.
Tip: Ask your estate agent or bond originator for a detailed cost breakdown upfront to avoid surprises.
Changing jobs midway through the process
Stable employment is a key factor lenders assess. Switching jobs or becoming self-employed shortly before applying for a bond can work against you—even if the new position pays more.
Advice: If you’re planning a job change, either complete the home purchase first or wait until you've been in the new job for at least six months before applying for a bond.
Overextending your budget
While a bank may approve you for a higher bond, it doesn’t mean you should spend the maximum amount. A home loan repayment should be comfortable, not crippling.
With rising living costs in Windhoek, Swakopmund, and other urban centres, it’s wise to leave room in your monthly budget for municipal rates, insurance, fuel, groceries, and unexpected home repairs.
Not getting pre-approved
Before falling in love with a property, get a bond pre-approval from your bank or bond originator. This not only gives you a clear idea of your budget but also strengthens your offer to purchase.
Bonus Tip: In competitive markets like Windhoek or Walvis Bay, sellers may favour buyers who already have pre-approval.
Skipping professional advice
Trying to save money by not using professionals, like estate agents, conveyancers, or bond originators, can cost you in the long run. These experts help you navigate the process, spot red flags, and negotiate better terms.
Choose registered property professionals familiar with the local market conditions and legal requirements under the Deeds Registry and Namibian legal framework.
Homeownership in Namibia is a long-term investment that can build wealth and security. However, navigating the process requires careful planning and sound financial management. Being financially prepared doesn’t just improve your chances of getting a home loan—it sets the foundation for long-term success as a property owner.
