Property and SA Homeloan tips: Owning property in South Africa is not as difficult as most would believe. All it takes is some determination, and the will to align yourself with what is required of you to secure the
Home Loan Advice: everything you ask for, you will receive Previously I explained that the first step to getting a homeloan and owning a new property is to: Find out what it is you really want. Make sure you have a clear picture in your mind of that new house Read more…
Mortgage Advice: Switch my home loan As an existing homeowner you have bargaining power. Over the years your property value has risen sharply while your bond has grown smaller – it’s time to use your bargaining power to secure a lower interest rate and save on bond repayments. Let’s look Read more…
South African Home Loan Tips As you can see by [this example] the affect of a 1% difference on your home loan interest rate could mean you’ll save as much as R100 000. Mortgage Innovations Click Here to apply online now and get a Fast Home Loan Approval. Plus cheaper Read more…
You’re about to learn how to reduce the interest paid on your bond and save more than R100k over the term of the loan.
Jason Bagley (visit his website) asks a question which I believe could help many South African homeowners save money.
He posted a question (here), asking whether it would be better to take out a 30 year homeloan but repay the loan based on what a 20 year loan would cost. Wouldn’t you save more?
Firstly, Jason is already on the right track here. The first step to building personal wealth is to reduce your debt.
In many instances we’re more interested in securing a homeloan for our “dream home”, but we pay no mind to the terms of the mortgage. I’m referring to the interest rate offered on your new (or existing) home loan.
Your home loan is most probably your biggest financial commitment, and it’s easy to understand that on an average sized mortgage of R500 000 the interest rate plays a huge roll in determining how much you’ll actually end up paying.
**With that in mind, let’s quickly look at whether a 30 year term or a 20 year is best, and then I’ll answer the question above.
– Or Just Skip to the Conclusion now.
The interest rate you’ll be offered is based on the risk the bank is taking in granting you the mortgage.
The lower the risk (the more like you are to pay off the bond) the better your interest rate will be. And the higher the risk, the higher the rate.
If you apply for a long 30-year term you’ll more likely get a higher interest rate than if you take your bond over 20 years.
So the shorter the term – the more likely you are to get a lower rate. Remember, the term is not the only factor affecting your interest rate.
**Now lets look at how much you’ll SAVE if you apply for a 30-year term (despite the higher rate) and repay the loan based on what a 20 year loan would cost:
Hot Tip – Home Loans South Africa Access Bonds have opened up a number of financial opportunities for homeowners. Unfortunately, most homeowners are unaware of the advantages offered to them by this innovative Home Loan product. Home Loans South Africa – The Basics: An Access Bond is simply a homeloan Read more…