Downgrading a Car - Buying a House

[Maelly]

I've got a situation, I'm starting a new job in PTA on Feb 2nd
I am also buying a house (something not more than 500k)
So, I will work with the agents to get my bond approved.
Just after speaking to one agent, he told me that I may need to fork out as much as 6k per month all costs inclusive (but less water and lights)
Currently I pay a lil over 3k for my car inc insurance.

I will get 1.3k House Allowance at my new job.
But looking at that bond, 6k is still a lot. Then I thought of selling my car (still under the bank) and repay the bank then get a much cheaper 2nd hand car (Tazz/ CitiGolf/ etc) and atleast pay under 2k per month inc insurance.

Any advice of how I should do this. Whether I should consider getting a much cheaper house for under 400k or any other advice.

Thanks

 

[Waaib]

I get what you are trying to do. It will all be about the timing. I reckon you need to sell the car first to free up the cash flow and then sign for the house. Driving a cheaper car is fine but if you are already stretched on the budget bay you should try go cheaper on the bond and car at the same time to give yourself breathing space.

You're going to need the extra cash to date the girl you like and buy toys for the kiddo at the same time.

 

[gregmcc]

6K seems about right. With a 400k house you will still probably be paying like 5k a month. The best would be if you had a large deposit to put down then your repayments would be a lot less.

How much left do you still have to pay on your car? If you sell it how much will you get for it?

Your not going to get much for under 400k - houses are still currently mucho expensive.

Also don't live beyond your means so that you can't safe each month. If the interest rates go up a lot of you need major car repairs then your stuffed.

 

[koeks]

I've got a situation, I'm starting a new job in PTA on Feb 2nd
I am also buying a house (something not more than 500k)
So, I will work with the agents to get my bond approved.
Just after speaking to one agent, he told me that I may need to fork out as much as 6k per month all costs inclusive (but less water and lights)
Currently I pay a lil over 3k for my car inc insurance.

I will get 1.3k House Allowance at my new job.
But looking at that bond, 6k is still a lot. Then I thought of selling my car (still under the bank) and repay the bank then get a much cheaper 2nd hand car (Tazz/ CitiGolf/ etc) and atleast pay under 2k per month inc insurance.

Any advice of how I should do this. Whether I should consider getting a much cheaper house for under 400k or any other advice.

Thanks

if you can afford to be without a car for a year then i would suggest that you do that. The get the house. then after a year get a car. R6k is fine for the house, they are a bit steep these days

Save up and enjoy your money man

Do you have to buy a house now? and anyway how much to you still owe on your car? How long have you had it for?

 

[Maelly]

You're going to need the extra cash to date the girl you like and buy toys for the kiddo at the same time.

Lol, did u just pick this up from another thread

But ya, a cheaper bond and care may just be what I need

The best would be if you had a large deposit to put down then your repayments would be a lot less.

How much left do you still have to pay on your car? If you sell it how much will you get for it?

Also don't live beyond your means so that you can't safe each month. If the interest rates go up a lot of you need major car repairs then your stuffed.

No deposit unfortunately. Been renting for the past 2-3yrs

Still a lot, only had a car for just about over a year. But I can get about R15-20k should I sell and repay.

Thats exactly what I want to avoid.

if you can afford to be without a car for a year then i would suggest that you do that. The get the house. then after a year get a car. R6k is fine for the house, they are a bit steep these days

Do you have to buy a house now? and anyway how much to you still owe on your car? How long have you had it for?

I cant be a pedestrian again

They sure are expensive hey

It's now or never, I'm not growing any younger.

 

[Jewelbox]

Where do you intend buying a house in Pretoria for 400K or 500K ? Maybe in Mamelodi.

 

[Maelly]

Mams, NO!!! Around Wonderpark/ Danville/ Wes Park and those surrounds. Preferably Wonderpark though cause it will be like 15-20k to work and to my parents' house.

 

[koeks]

okay. just don't over en-debt your self hey. we have come just a lesson... if you can afford a bond of R6k per month, take one for R5k just in case something happens.. it's not good to live life without any savings...

 

[Pyro]

I'm currently buying a house myself. Picked it up for a cheap R400k.

It's currently a requirement that you pay 10% deposit. Very little chance of leeway there. Only Nedbank would still settle for 5%, and even then they wanted ABOVE PRIME for a home loan.

I had to puke out the R40k deposit, and about R15K for various costs. Repayment would only be about R4.5k though, so within about 3 years I'd actually be paying less to buy than I would have if I was still renting.

All that at a relatively steep 14.7% (now 14.2%, it's 0.8 below prime).

Interest rate should drop another 1.5% over the next year, unless something really bad happens.

Very small place, but should be easier to push payments once I've paid my car off. Once it's finished, I can upgrade to something more family-friendly.

 

[Fuma]

Mams, NO!!! Around Wonderpark/ Danville/ Wes Park and those surrounds. Preferably Wonderpark though cause it will be like 15-20k to work and to my parents' house.

You can buy a decent 2/3 bed room "flat" in town around that amount - unless you are not a flat/town person.
The nice thing about a flat is that you will always get someone to rent it out to if you are in town should you decide to move out. I bought a decent 2.5 bedroom flat for R350K (it was initially R480K). I intend paying it off in in the next 5 years or so - someone could have bought an S3 with that money.
When I buy my dream house, I can have extra cash from this flat.

 

[Jewelbox]

I did'nt know that there are such cheap houses in Pretoria, maybe because in the east, houses are still rather expensive.

 

[blunomore]

Maelly, I am fairly sure that interest rates should drop in the next two months and I am sure the financial experts here could even give you an indication of how much.

That might relieve your burden on the bond.

Edit: I see Pyro already addressed the interest rate issue.