Tips for buying a house first time?

[Json C]

If you're paying 9.3% interest on your home loan, and 14% on your car loan, it would make sense to do that.
You also save on the monthly loan fee.

It makes no sense when you have to repay that amount back over 15 years!!!!!!

 

[xrapidx]

If you're paying 9.3% interest on your home loan, and 14% on your car loan, it would make sense to do that.
You also save on the monthly loan fee.

Yeh, and if you keep paying the same amount into your bond that you would've paid into a car loan, you pay a fortune off your house in the same period as the car loan. Its a win situation.

 

[xrapidx]

It makes no sense when you have to repay that amount back over 15 years!!!!!!

You don't have to pay it off over 15 years - keep paying what you would've paid into the car loan, e.g. R3500/pm - into your home loan. You'll pay off the car in a shorter time, and the rest will go towards your bond?

 

[Json C]

You don't have to pay it off over 15 years - keep paying what you would've paid into the car loan, e.g. R3500/pm - into your home loan. You'll pay off the car in a shorter time, and the rest will go towards your bond?

That would make sense, but then why not buy the car through the home loan to begin with? Aren't there penalties for paying off a car loan early?

 

[Ou grote]

That would make sense, but then why not buy the car through the home loan to begin with? Aren't there penalties for paying off a car loan early?

I did that, when I had enough cash available in my bond.

Not sure about penalties for car loans, suppose it depends on where u got the loan.

 

[xrapidx]

That would make sense, but then why not buy the car through the home loan to begin with? Aren't there penalties for paying off a car loan early?

Not if you give three months notice-

Ideally, you would just use your home loan - but, for example, my case - the car loan was taken out a year before the home loan.

 

[Json C]

Not if you give three months notice-

Ideally, you would just use your home loan - but, for example, my case - the car loan was taken out a year before the home loan.

It will also only work if the interest rate on the home loan is less than the interest rate on the car. You can still get a new car on prime less 5 or 6%. Most first time home buyers will be lucky to get prime less 1 or 2 on their bonds.

 

[xrapidx]

It will also only work if the interest rate on the home loan is less than the interest rate on the car. You can still get a new car on prime less 5 or 6%. Most first time home buyers will be lucky to get prime less 1 or 2 on their bonds.

Yeh - but you'll only get that on a NEW car. And new car prices are insane - I don't think I'll ever spend more than R200,000 (or the equivalent in time) on a car.

 

[Paul_S]

It makes no sense when you have to repay that amount back over 15 years!!!!!!

It's makes a lot of sense if you put your car payments into your bond.
You'll save a HUGE amount of interest in the long run even if the payments are over a longer term.

Worked example:
20 year house bond of R 1.5 million at 10% interest
Monthly repayments: R 14,475
Interest paid over 20 years : R 1,974,077

5 year car loan for R 200K car at 10% interest
Monthly repayments: R 4249
Interest paid over 5 years : R 54,964

Total interest paid for house and car = 54964 + 1974077 = R 2,029,041

Now lets increase the bond and pay the car off using the bond:
20 year house bond + car loan at 10% to the value of R1.7 million
Monthly repayments: R 16,405 + R 4249 = R 20,654
Total interest paid over 20 years : R 1,182,140
Bond term shortened from 20 years to 11 years!

Total savings : R 846,901

 

[xrapidx]

Thanks - was to lazy to work that out

 

[Json C]

Thank you. It makes a lot of sense if you buy the two together, but can you really buy the two together?

Today no bank is giving you a 100% bond. You need to put down a significant deposit (some banks ask for 30%). The bank grants a bond on the value of the property: there are assessors send to the property to evaluate the value of the property.

So really this will only work for people that are lucky enough to be on a "access bond"?

 

[Ou grote]

Thank you. It makes a lot of sense if you buy the two together, but can you really buy the two together?

Today no bank is giving you a 100% bond. You need to put down a significant deposit (some banks ask for 30%). The bank grants a bond on the value of the property: there are assessors send to the property to evaluate the value of the property.

So really this will only work for people that are lucky enough to be on a "access bond"?

I would think that most people are on access bonds

 

[xrapidx]

Thank you. It makes a lot of sense if you buy the two together, but can you really buy the two together?

Today no bank is giving you a 100% bond. You need to put down a significant deposit (some banks ask for 30%). The bank grants a bond on the value of the property: there are assessors send to the property to evaluate the value of the property.

So really this will only work for people that are lucky enough to be on a "access bond"?

They'll give you 85% of the property's value - so if you offer R1,500,000 - and the property is valued at R2,000,000 - - you don't require a deposit - and you have access to R200,000 if you register the bond at R1,700,000 (85% of R2m) .

Thats my understanding anyways.

 

[Json C]

They'll give you 85% of the property's value - so if you offer R1,500,000 - and the property is valued at R2,000,000 - - you don't require a deposit - and you have access to R200,000 if you register the bond at R1,700,000 (85% of R2m) .

Thats my understanding anyways.

How much is the transfer duties/costs on 1.7 million rand bond?

 

[Sly21C]

I'm thinking of buying house in Soshanguve and then rent it out. A while back I was given a pamphlet adverting newly built houses in Soshanguve, a 3 bedroom house going for R300 K and a 2 bedroom priced at R230 K. Now if I can get that and then rent it out would be a good investment I think. But I would like to buy my own house somewhere in Centurion, hopefully at Eco-park (love that area). Still not sure if property prices have bottomed out yet though.....

 

[Json C]

I'm thinking of buying house in Soshanguve and then rent it out. A while back I was given a pamphlet adverting newly built houses in Soshanguve, a 3 bedroom house going for R300 K and a 2 bedroom priced at R230 K. Now if I can get that and then rent it out would be a good investment I think. But I would like to buy my own house somewhere in Centurion, hopefully at Eco-park (love that area). Still not sure if property prices have bottomed out yet though.....

Do you think it would be a worthy investment? Fixing that up after it gets destroyed by the renters may turn out to be quite costly?

 

[Json C]

It seems banks are quitely rethinking the 100% bond thing anyway:

http://www.fin24.com/articles/default/display_article.aspx?ArticleId=_2528591




100% home loans on offer again
Jun 11 2009 09:12 Elma Kloppers
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Johannesburg - Banks have quietly adjusted their approaches to risk and some are again granting 100% home loans to the affordable side of the housing market.

This surprising twist came to light on Wednesday at the launch of Shaft Citi, a new development for affordable housing in Germiston on the East Rand.

Of the 67 sectional title units already sold, 26 were taken up with 100% bonds, says Ben van Niekerk, a director of Nu Citi Developments, the Shaft Citi developer.

He explains that negotiations were conducted with four major banks, and Absa and Nedbank indicated that they would approve 100% loans for the development.

First National Bank still has to take a final decision and Standard Bank is considering only its own clients for bond approval.

Nedbank will however approve 100% home loans only for properties up to R250 000, and buyers will be assisted through the entire purchasing process by a mentor.

Dr André Dippenaar, development manager for Pam Golding Estates (PGE), which is marketing the development, says banks are slowly but surely relaxing their strict lending criteria.

This product is aimed at households earning R7 500 to R25 000 a month.

Shaft Citi will be built on the site of an old mine hostel 17ha in size, and on completion will comprise 1 968 units.

Jacques du Toit, senior property analyst at Absa's home loan division, says that on a 100% bond of R150 000 over 20 years the monthly payment will be R1&n548 at the current prime rate of 11%.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

 

[xrapidx]

How much is the transfer duties/costs on 1.7 million rand bond?

You pay the transfer duties on the offer price, not the bond? (I think).

In my case, transfer fee's and lawyer fees, etc. on R1.6m are around R90,000 - R95,000

 

[Json C]

You pay the transfer duties on the offer price, not the bond? (I think).

In my case, transfer fee's and lawyer fees, etc. on R1.6m are around R90,000 - R95,000

Ouch. I remember reading somewhere that the bulk of that = tax and lawyers fees. The actual deeds cost is just a few grand.

 

[xrapidx]

Ouch. I remember reading somewhere that the bulk of that = tax and lawyers fees. The actual deeds cost is just a few grand.

Its ridiculous - I don't see why so much money is required to transfer a house - a complete rip off. Worst part is, I have to save the money before transfer Its like R22,500 a month.