One of the most frequently asked questions we receive from our clients is whether they should apply for a 20 year bond, or whether they should extend their home loan term up to the maximum of 30 years. There are number of advantages and disadvantages to each type of bond, but the most obvious benefit is that a 30 year term would equate to a low monthly bond repayment. But this low, more affordable, monthly repayment comes at an expense. The total interest you’ll end up paying on your 30 year bond will be significantly more . For example take a look at the table below that compares the monthly repayments and total interest of a R750 000 bond
When it comes to home loans the type of Bond you will qualify for can vary quite a lot. Some of the factors that will determine what bond you qualify for include: your income; the type of property you're buying; or your nationality. Home Loans For Affordable Housing Clients Currently most banks are offering exclusive 100% bonds for clients who fall in to the affordable housing range. Affordable Housing Bonds are available to household earning a joint income that is less then R15 000 per month. These types of home loans include the full purchase price of the property, and may also cover the addition transfer and bond registration fees... [Read More] Home Loans For Repossessed Houses The bank
Over and above securing the actual capital finance for a new property purchase, it is important to understand the range of interest rates banks are presently financing at and how the personal aspects of your application can affect the interest rate offered on your home loan. Some important factors that would influence the pricing decisions include: loan to value percentages, location and physical grading of the property purchase, personal credit score ratings, borrower types [ for example self employed verses full time employed], property types [ vacant land or building loans verses completely built property structures], and finance affordability All of these factors are compiled to determine an interest rate suitable for both the lender and borrower. The only
On March 25th, 2010 the South African Reserve Bank (SARB) cut interest rates by 0.5%.The prime rate moved from 10.5% to 10%. The Prime Interest Rate is used by the major banks on their home loan products. How Does This Interest Rate Cut Affect Your Pocket?
The wonderful thing about having several ways to manage your finances is that you only need one of them to work for you to break free of bad debt, and turn a tough situation into a successful one.
Every Rand that you are able to invest into your Home Loan is like a small soldier / builder that is just waiting to begin earning you more money. If every Rand you invest is like your personal employee [who specialises in making more money] you should have thousands of 'employees' waiting in your Homeloan - looking for work. Now for once you’re able to reverse the roles, and begin to make your HomeLoan work for you!