Should i get a home loan on prime plus?

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poorestguy

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Hi guys, after looong year of waiting I finally got a homeloan approved! Now rememebr that I am post NCA and recession so am just grateful for a loan.Now they catch is they offering prime plus 0.6!WTF? Is this worth taking? and I only have a 5% deposit. Any advice? Can I renegotiate the interest rate later?
 
poorestguy said:
Hi guys, after looong year of waiting I finally got a homeloan approved! Now rememebr that I am post NCA and recession so am just grateful for a loan.Now they catch is they offering prime plus 0.6!WTF? Is this worth taking? and I only have a 5% deposit. Any advice? Can I renegotiate the interest rate later?
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Scout around. What rates are the other banks offering ?
 
apparently ABSA will only give 70% of loan value if you are not their customer so forget that. Only options left is Nedbank and Std Bank. Think they need 10% deposit..slightly outa my reach. Is there a way if renegotiating interest rates at a later year?
 
Prime at the moment is 9%. So 9.6 will be very good. Fixed rate is guarenteed higher, by some 2-3%. If the interest rate hikes, you can then freeze / fix your rate for a period of time. The longer the period, the higher the extra %.
 
there must be someway of getting better interest rate. i actually DO have a squeaky clean credit record for 4 years, come on!would it have helped if I had a bigger deposit?I did some research and saw that if you're not buying for over 1 mil then ur interest rates are gonna suck.sigh the poor have no chance:)
 
poorestguy said:
apparently ABSA will only give 70% of loan value if you are not their customer so forget that. Only options left is Nedbank and Std Bank. Think they need 10% deposit..slightly outa my reach. Is there a way if renegotiating interest rates at a later year?
Click to expand...

I got 90% from them, I bank with Standard...
 
poorestguy said:
there must be someway of getting better interest rate. i actually DO have a squeaky clean credit record for 4 years, come on!would it have helped if I had a bigger deposit?I did some research and saw that if you're not buying for over 1 mil then ur interest rates are gonna suck.sigh the poor have no chance:)
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Since you didn't answer let me just make sure you use the option if you haven't, have you tried SA Homeloans?
 
poorestguy said:
there must be someway of getting better interest rate. i actually DO have a squeaky clean credit record for 4 years, come on!would it have helped if I had a bigger deposit?I did some research and saw that if you're not buying for over 1 mil then ur interest rates are gonna suck.sigh the poor have no chance:)
Click to expand...

Prime + .6% is actual good. The days of prime less 2 is long gone.
 
Prime + anything less than 1% is a pretty good rate...

I fought LONG and hard with Nedbank to get mine down to Prime - 0.05%
 
I got prime minus 0.85 from FNB... First time buyer.

But I did have a high deposit, I am guessing the higher the deposit the better for you lend rate.
 
BBSA said:
Prime + .6% is actual good. The days of prime less 2 is long gone.
Click to expand...

I only managed to get prime + 0.5% (actually JIBAR equivalent) from SA Home Loans in 2008.
That is with a squeaky clean credit record and a 20% deposit.
ABSA wanted prime +1%
Nedbank wanted prime +4.5%

It seems that prime minus anything is reserved for people with a very low risk profile (big salaries with a Masters or Doctors degree).
 
Maybe I should have shopped around when I bought. STD gave me prime -1.35 but I didn't try and negotiate or shop around.
 
poorestguy said:
Can I renegotiate the interest rate later?
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Yes you can. Once you have paid off some of the loan you can ask to be re-assessed. The banks look at what you earn vs what the repayment is. If that ratio changes they can re-assess. Some have rules about how often you can do this eg. only once per year or only every 6 months.

Lets say you earn R10,000 per month and your repayment is R3000. that means 30% of your income goes to the loan. If you pay off some of it and apply it to the bond then your repayment could drop to 20% of your income. The bank now has less risk in giving you the loan so can re-assess and give you a better rate. I've been through this process once with FNB.
 
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Waaib said:
Yes you can. Once you have paid off some of the loan you can ask to be re-assessed. The banks look at what you earn vs what the repayment is. If that ratio changes they can re-assess. Some have rules about how often you can do this eg. only once per year or only every 6 months.

Lets say you earn R10,000 per month and your repayment is R3000. that means 30% of your income goes to the loan. If you pay off some of it and apply it to the bond then your repayment could drop to 20% of your income. The bank now has less risk in giving you the loan so can re-assess and give you a better rate. I've been through this process once with FNB.
Click to expand...

Who do you contact to renegotiate the rate? Homeloans call centre?

Is there a cost involved?
 
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