zerocool2009
Honorary Master
Personally I wouldnt make my bond fix at all, even if the interest rates climb by 10%. The power of a flexi is much more powerful (my honest 2c)
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Question of the Day: How do you normally pay for purchases in stores?
Buying my first house
- Thread starter joker08
- Start date
Personally I wouldnt make my bond fix at all, even if the interest rates climb by 10%. The power of a flexi is much more powerful (my honest 2c)
zerocool2009
Honorary Master
What I have done for the last 15 years (pay my salary and every sent I can into my bond), that way my prepay money is working for me. So even if rates drops or go up, I still do the same.
The result : Investing in yourself, and you got access to the money with 1 click of a button.
One thing that banks HATES .... guys doing that constantly, as the client score much more vs the bank !
So when you do a fixed rate, you won't get it at 7, you'll probably get it at 10 or 11 etc.
Much higher (the bank will never take the risk).
So flexi is generally better
But we can't tell the future, all we know so far, flexi won.
How much money would it be wise do set aside, as an emergency buffer, for things that might go wrong or need to be done right away, e.g. replace the boiler, install burglar guards, change locks, repair wobbly steps, and fix a gutter?
Assuming not a fixer-upper, or significant, planned repairs or renovations, but just an ordinary suburban house that's been lived in for a few decades by families. It's dire to move into a house and then be stifled by the bond repayments, with no room to keep safe and somewhat comfortable.
Assuming not a fixer-upper, or significant, planned repairs or renovations, but just an ordinary suburban house that's been lived in for a few decades by families. It's dire to move into a house and then be stifled by the bond repayments, with no room to keep safe and somewhat comfortable.
zerocool2009
Honorary Master
I got a quote to fix my bond for 6.95% now for 5 years. It aint a bad "fixed" rate, take note, but using of a prepaid bond is much powerful, my honest 2c. Chatting to a very snr HL expert in FNB, her reply "she would NEVER advise someone to fix their rate".
5 years isn't really a risk here, I'm more referring to a new buying using 100% bond at 20 / 30 years.
Personally I try to have 3.5% of the value of the property always available (for the property).
Emergency funds etc is for other emergencies.
(it's probably safer to bump that to 5%) you might never need it, but it's good to have.
Problem is you can't do too big because that is a portion of money that doesn't work hard for you because you need access to it.
zerocool2009
Honorary Master
If you are new to the buying house sector then I would agree. I am paying off bonds smartly within 2 to 3 years (and that is why I say a FLEXI is more powerful than fixing it).
Debt is debt, if you prepay your bond (it snowballs in time).
That is the most important advice here.
Snowball effect of debt.
Pay more in and you win the game, pay the normal amount and the bank wins.
zerocool2009
Honorary Master
I cant express in words if someone just pays his debt off in the 20 or 30 years scheduled. It all started on my side by R250 a month extra, then R500, then a R1000, then my bonus. Now my salary (and boy ohhhh boy) -> It works.
Then when rate reviews come and it goes up or down, just stick with the same plan ! (and you will thank yourself 5 or 10 years down the line)
Then when rate reviews come and it goes up or down, just stick with the same plan ! (and you will thank yourself 5 or 10 years down the line)
KleinBoontjie
Honorary Master
I have my bond with Nedbank, currently at 7% interest. I've spoken to them, today. They offer me 8% fixed for 36 months. Also, they said that it will still be a flexi bond, I won't loose that. Does it sound like a good deal? What else can I ask them, or look out for?
zerocool2009
Honorary Master
Fnb drops the flexi! Try for 60 months (or get a quote for 5 years if possible)
Drifter
Honorary Master
Dont. Not now anyways.
So the house I was planning to buy is no longer available because the seller dint get the house he was planning to buy.
I was interested in the house because it had two flatlets that was generating a monthly rent of 10000 together.
Such properties are hard to find.
Now my options are
1. Keeping looking for a similar house, which might take sometime .
2. Get a cheap /small house around and pay it off in the next 5-10 years and move on to the next.
3. Get a house which has a big backyard and make those flatlets myself.
Problem with option 2, those houses are really shitty or needs a lot of work. But i dont want to continue paying rent as well.
The problem with option 3 is after paying the deposit and transfer duties we won't have any money left to make those flatlets. Does the bank grant an additional loan for such additions/improvements?
I was interested in the house because it had two flatlets that was generating a monthly rent of 10000 together.
Such properties are hard to find.
Now my options are
1. Keeping looking for a similar house, which might take sometime .
2. Get a cheap /small house around and pay it off in the next 5-10 years and move on to the next.
3. Get a house which has a big backyard and make those flatlets myself.
Problem with option 2, those houses are really shitty or needs a lot of work. But i dont want to continue paying rent as well.
The problem with option 3 is after paying the deposit and transfer duties we won't have any money left to make those flatlets. Does the bank grant an additional loan for such additions/improvements?
zerocool2009
Honorary Master
I wont personally buy or create flatlets on the same property! “Dis kak soek”, so say it politely. I dont want to live 20m away from tenants! Picture you have an issue, or cant get them out.
I work with a guy who sold his house, as the tenants who live in the flatlet stopped paying water and lights, including rent.
Regarding a bond, if you buy something like that, the bank will see it as being “used”, and give you a crap rate.
zerocool2009
Honorary Master
My vote is nr2.
I agree with this. Our tenants had abuse issues and we got pulled into their dogshit. The wife says she can't live with the husband who is jobless and abuses her. The next day they look like a newly wed couple. This happened a few times. You are left looking like a tool with a headache and half your rent money. Once you get them out, your place will look a crack house. Redoing it takes time and money.
Option 2 or let your flatlet out on airbnb but you are not guaranteed a steady income from it.
I would be worried about number 3. Apart from issues already mentioned, I would expect that you would need to get plans approved, register the new addresses, possibly zoning issues to sort out, etc. Would be a headache, and may never be legally achievable.
I also suggest 2 - buy what you can afford now, and when you can afford better, leave and rent the old one out.
SauRoNZA
Honorary Master
No, because they add 2% odd when they do that and statistically the bank almost always wins.
They only do things that are in their best interest.