Extension to my bond

[Gothan]

Hi

Last year march I bought a house in PTA, it was build in 1916, but was in excellent condition, except for the kitchen. So after a year the wife and myself decided to see how much we can get on an extension, so we can start to remodel.

Well luckily for such a short period of ownership, I got an extension of about 55000. Now my question is this to all the homeloan fundies. I have paid of about R6000 on the original loan amount. Does that mean, that the amount I get out for remodeling would be R55000 + R6000, I already paid on the original bond. Or will I only get the R55000 out for the new extension (then what happens to the amount I have already paid?)?

Just trying to get all the info so I can start budgeting and see what can be replaced and what will add the most value (When I ask the question to the call centre person, I either did not state my question correctly or they did not know, because I was just met with silence)

 

[Venomous]

did your bond drop by R6k & now you took R55k?

If example:

your bond was R800k then you paid a few months. Bond dropped to R794k.

Now you asked for R55k
R794k+R55k =R849 is where you bond would be before the next payment.

To get access to that R6k you should have requested an accessbond.

 

[Gothan]

Actually what happened is this. Say the bond I took out originally was 795K, so then I apply for an extension (second mortgage). They come back and say, ok They will give me R850K. Hypothetically of course. So if I go and register for the R850K amount, should it not in theory be R844K or should I get R61K in cash paid out as the difference between the two when I register for the second one? Hope this makes sense

 

[Venomous]

nope,

you had R795k they gave you for buying the house. Now you take more so the overall bond is R850k.

That paid back amout is just that, paid back. To access that you need an access bond.

Remember adding the R55k increased the R-value of the interest you will be paying. That R6k sits there & cussions it so infact you will pay interest on R844.

If you change to an access bond & ''draw'' that 6k then you will be paying interest on R850k which again will have a slightly higher R-value than on R844

 

[Gothan]

ah ok

 

[phoneJunky]

Hmm, I also bought a house last year March. I also want to do some stuff around the house, maybe I should ask them if I can get an extension.

 

[Paul_S]

The thought of doing anything that will increase my bond makes my blood go cold.
Have you calculated how much interest you're going to pay on that extra R55000 over the term of the loan?

 

[phoneJunky]

It is better to just take the loan then try too save for it. I am trying to save it but I put all the money in my flexi-loan, but it is just going to take to long. But if you get the extension and you pay it off quickly you always have that option to get that part of the loan again if you are in a pinch.

 

[Freshy-ZN]

The thought of doing anything that will increase my bond makes my blood go cold.
Have you calculated how much interest you're going to pay on that extra R55000 over the term of the loan?

Yeah, he has just added to the captial amount again and being charged full interest. But sometimes its the only way to get needed money.

 

[phoneJunky]

I just have a question regarding the extension, do they revise your interest rate, or do you keep the interest rate you got the first time round?

 

[Gothan]

You can fight for a better interest rate, but I am on the same rate