A home is one of the biggest asset purchases you'll make in your life and many jump into it without checking whether they can afford it. You should not assume that because you can pay rent, you can pay off a home loan. There are additional risks and costs to consider, and home ownership can end up being a lot more expensive than renting.Western Cape estate agent Annien Borg says: "You need to establish the amount you will be able to afford, and this includes your monthly repayment as well as monthly costs incurred as a homeowner such as rates and insurance, or a monthly homeowner's levy if the property is in a residential development or estate."Making a big deposit could help you get a lower interest rate, which translates into a huge saving in the long term.story_article_left1Also, be sure to keep up with all your monthly credit repayments. This will make you less of a credit risk and will give you room to negotiate a lower interest rate.Other expenses to consider:For most first-time home buyers, the costs of the process are a shock.Beyond having a deposit saved up, you will need to have cash set aside for transfer duty - also known as transfer tax - legal fees and the cost of moving, says Borg, the MD of Pam Golding Properties in the Boland and Overberg regions.Transfer duty is paid directly to the South African Revenue Service whenever a property changes hands.However, those buying a new home from a developer do not have to pay transfer duty, because VAT is included in the purchase price and is paid to SARS by the developer.To put the cost into perspective, if you earn R35,000 a month and are looking at a home loan of R800,000, you can expect to pay back about R7,481 a month for 20 years at an interest rate of 11.1% after putting down a 10% deposit.Your monthly instalment is 21.37% of your monthly income - and you haven't even looked at other costs such as water, rates, electricity or levies.The transfer duty depends on the price of the property: it is only charged if the house or flat costs more than R750,000.block_quotes_start Other upfront costs to be aware of are bond registration fees, which are a percentage of the purchase price block_quotes_endAnd the transfer duty is not a set amount, so make sure you get the latest rates to keep calculations as accurate as possible.For this tax year - from March 1 2016 to February 28 next year - the transfer tax will be between 3% and 13% of a proportion of the purchase price.In addition, a flat rate starting at R15,000 is also charged for properties sold for more than R1.25-million. Go to sars.gov.za to get the details of the taxes required by SARS.On the R800,000 property example used above, you can expect to pay a 3% transfer duty on anything above R750,000, so R50,000 will be taxed - unless you're buying directly from a property developer.And then there's the transfer fee you have to pay, which is different to transfer duty/tax. This fee is paid to a conveyancing attorney to have the property transferred into your name.story_article_right2Your transfer fee depends on the purchase price.Other upfront costs you need to be aware of are bond registration fees, which, again, are a percentage of the purchase price.To be on the safe side, budget 3% of your purchase price to pay registration fees, although the final cost will be determined by your attorney.You'll also pay an initiation fee of up to R5,700 for the financial institution to process your loan.When you decide to buy a property, you'll have to consider the costs associated with the location. An area with high crime could translate into higher insurance rates, which need to be added to your monthly expenses.Remember that each type of dwelling - flats, properties in complexes or stand-alone houses - will have different costs.Make sure you get help from a mortgage originator - you may have to fork out some money, but it should prevent you from buying a problem property that will end up costing you more in the long run.tsamelad@sundaytimes.co.za..