Home Loan advice

[tRoN]

So I’ve applied for a loan on a property selling for 6 million with a 10% deposit.

ABSA and Investec have offered prime less 1% thus 6%.

FNB is messing me around and have not come back to me yet and asking for more financial info.

Standard bank has offered a tiered sort of rate with the average at 5.96%. (See below for the breakdown)

Doesn’t seem like much of a difference upfront but is the tiered option (which apparently is unique to SB) beneficial to me somehow in the long term??

And ABSA now wants to appeal to beat the offer and enticing me with their rewards cash back on the loan amount.

Maybe someone can advise me on this.

 

[tRoN]

 

[zerocool2009]

What I can say! If you go via fnb and go direct, they will pay 50% of the bond costs, and R6000 on the first debit order.

Let me get the info how much you will save going via fnb. (Whats your fnb package if you bank with fnb)?

One thing.... that insurance doesnt look right

 

[tRoN]

What I can say! If you go via fnb and go direct, they will pay 50% of the bond costs, and R6000 on the first debit order.

Let me get the info how much you will save going via fnb. (Whats your fnb package if you bank with fnb)?

One thing.... that insurance doesnt look right

The insurance is a quote and I’m not obliged to accept that. What’s wrong with it?

What part of the costs are discounted. My friend will do the bond reg and will offer me at least a 50% discount or more.

Is there any Ebucks that will be gained ?

 

[Hamster]

All I can tell you is that having a home loan or anything with Investec is a much more relaxing affair than with any other bank I've been with.

 

[Pineapple Smurf]

Sweet Jesus Your repayments are way higher than my Cost To Company !!!!!!!!!!!!!!

 

[zerocool2009]

The insurance is a quote and I’m not obliged to accept that. What’s wrong with it?

What part of the costs are discounted. My friend will do the bond reg and will offer me at least a 50% discount or more.

Is there any Ebucks that will be gained ?

That on a R6 000 000 or R5 400 000 (i assume life cover). Wow, its cheap

The bond registration costs. So work out online whats the costs roughly, its 50% back (via Nav). Nothing else! No friend connections allowed lol

Yes.......... R6000 in eb for the first debit order after the second month. And the 50% back in fees. Dint know if thats also eb or rands

 

[zerocool2009]

Shop around, its a huge amount

The bond costs is R66 000.... so R33 000 back ajnt bad

 

[tRoN]

Ok forget about the discount as my friend is on the bank panel and I’ll get 50% discount in any case.

I’m asking about the tiered interest rate option

 

[zerocool2009]

Ok forget about the discount as my friend is on the bank panel and I’ll get 50% discount in any case.

I’m asking about the tiered interest rate option

Explain the last part please. What interest rate option.

So let JC handle your application then

 

[WollieVerstege]

Best thing to do is ask each bank for an amortization table for the term of the loan. It will show the capital and interest components.

At the very least they should be able to tell you how much interest you will pay in total for the duration of the loan. Make your decision based on that.

Based on that, I would say tiered or not is irrelevant.

 

[zerocool2009]

Best thing to do is ask each bank for an amortization table for the term of the loan. It will show the capital and interest components.

At the very least they should be able to tell you how much interest you will pay in total for the duration of the loan. Make your decision based on that.

Based on that, I would say tiered or not is irrelevant.

If the gent ask a qoute, its all listed in the qoute, overall cost

 

[Thor]

Off topic, what do you do for a living?

 

[SauRoNZA]

Best thing to do is ask each bank for an amortization table for the term of the loan. It will show the capital and interest components.

At the very least they should be able to tell you how much interest you will pay in total for the duration of the loan. Make your decision based on that.

Based on that, I would say tiered or not is irrelevant.

This.

Forget about the trickery of how the interest works, just look at the total interest over the term and it will be quite clear who wins.

There are or course side like benefits like the rewards schemes and things but these also need to make sense in the context of the entire term, and therefore you can safely assume they’ll become less and less valuable over time.

 

[tRoN]

Off topic, what do you do for a living?

Drug dealer and pimp....why?

 

[tRoN]

This.

Forget about the trickery of how the interest works, just look at the total interest over the term and it will be quite clear who wins.

There are or course side like benefits like the rewards schemes and things but these also need to make sense in the context of the entire term, and therefore you can safely assume they’ll become less and less valuable over time.

There is a 32k saving over the term with the standard bank offer if you put the numbers into a calculator.

I expect the saving to be more once I sell my existing property and put the cash into the bond due to the tiered interest rate which is lower at a lower loan amount.

My question is about the access facility. Do all banks offer this ?

 

[zerocool2009]

There is a 32k saving over the term with the standard bank offer if you put the numbers into a calculator.

I expect the saving to be more once I sell my existing property and put the cash into the bond due to the tiered interest rate which is lower at a lower loan amount.

My question is about the access facility. Do all banks offer this ?

At a stage Absa cancelled theirs. I would say, if you apply for a bond at all (any) bank, that should be question number 1.

How I started was to take out 1 bond, get a tenant. Prepaying that bond. In year 2 I got another bond, same story.

10 years down the line, 6 properties valued at R9 000 000, my debt now is R1 400 000 only

Dont do endless sums, just prepay your bond and save monthly on interest.

My motto with property, the first primary house you buy in life is the longest to pay off. The second one, is 50% shorter if you stick with the rule

Its now snow balling (having 5 tenants in my private investment club).

In your case, its your own property, so put as much cash in asap, even a bigger deposit.

 

[Shi]

@OP, I assume that the interest rates quoted are linked to prime (i.e. no fixed rate)?

 

[SauRoNZA]

There is a 32k saving over the term with the standard bank offer if you put the numbers into a calculator.

I expect the saving to be more once I sell my existing property and put the cash into the bond due to the tiered interest rate which is lower at a lower loan amount.

My question is about the access facility. Do all banks offer this ?

Don’t think they are allowed NOT to offer it any more, unless it’s an Islamic account.

Every home loan the last ten years or so that I know of has an access facility.

But if that’s your plan then yes go for that offer, or have someone else match it.

Be mindful your mate will only be able to discount you the actual conveyance fees, not the bond costs, unless he happens to he approved by the particular bank for that. Usually they have their own lawyers to do it.

 

[tRoN]

Don’t think they are allowed NOT to offer it any more, unless it’s an Islamic account.

Every home loan the last ten years or so that I know of has an access facility.

But if that’s your plan then yes go for that offer, or have someone else match it.

Be mindful your mate will only be able to discount you the actual conveyance fees, not the bond costs, unless he happens to he approved by the particular bank for that. Usually they have their own lawyers to do it.

Thanks for the reply.

Apparently only SBSA offer that tiered option unless another bank can match that lowest tier

My friend is on the banks panel for bond reg and not only conveyancing