Question Answers regarding new home loans in SA

Q: My husband and I have been renting since we got married 2 years ago. We are now in a relatively stable financial position and would like some advice on buying our first home.

A: The decision to buy a home has proven to be one of the best made for millions of happy homeowners. It’s a fact that property is a good investment, especially when you compare it to paying rent. It is important however to enter the property market with a good understanding of how a property purchase works, what your costs will be and a respect that this is probably one of the largest financial commitments you will ever make. Investors with reasonable deposits can find outstanding opportunities in the current property market – the power has shifted from sellers to buyers and the prices are reflecting this change.

Your Mortgage Plus consultant will give you the best advice on all aspects of your home purchase, and most importantly on financing it, particularly when the banks differ in their approach to lending. We will help you understand the different interest rates, fees and charges, and terms and conditions available. We will explain to you the features of the different loans and why they are more suited to your individual requirements.

Important pointers to consider:

• Know what you can afford and the costs – www.mortgaepluscc.co.za
• Consolidate your finances
• Significant savings are possible by consolidating all your finances. As home loan rates are significantly lower than those for personal loans, overdrafts and credit cards, but significantly higher than savings and current account rates, it makes sense to consolidate everything into your home loan account.

Then, by effectively structuring your finances, you can significantly reduce your total home loan debt. Arranging part of your salary to be credited directly to the loan and making additional repayments on an ad hoc basis (like when you get a bonus) will have very beneficial results. By sticking to a workable, monthly budget and avoiding unnecessary debt, you can repay your loan much more quickly and save vast amounts of interest. To find out how much interest you can save and how many years you can take off your loan, contact us today.

Q: My wife and I are talking about buying a home but I am not sure how to calculate what type of home loan I can afford. Please can you advise what calculation one needs to do to work this out and what other fees, levies and duties there are over and above the purchase price.

A: Before you start looking for a home, you need to do a few calculations to establish your price range, your repayments and the once-off costs of the purchase.

To work out the loan amount you qualify for, you have to be realistic in calculating the monthly amount you will have available for the repayment for the loan, rates and taxes or other property levies.

The Mortgage Plus Affordability Calculator on our website uses the simple criteria of not committing more than 30% of your monthly income for loan repayments. This is used to try and ensure that you do not over commit yourself financially in the event of interest rate increases and other monthly expenses. The calculation is based on your Gross Monthly Income, the current interest rate and the number of years it will take to repay the loan.

In terms of fees, levies and duties, the purchase of property is levied by the government in terms of raising transfer fees and there are also legal and admin costs for the registration of the home loan. Most of these costs are due upfront, before transfer of ownership can take place.

The Registering Attorneys Fees are for the service of registering the bond over the title deeds of the property. The amount varies according to your home loan amount. The Attorneys also charge a levy to cover the costs of posting documents to other conveyancers, the bank, estate agents, the Deeds Office, to you personally, etc. The amount is normally fixed and differs per law firm.

The Deeds Office also charges a fee for the legal registration of the mortgage bond over the property. The amount is determined by the amount of the home loan and is scaled from a minimum of R200 to a maximum of R1000.

The Transfer Duty charged for individual persons by the Deeds Office is 0% for purchase price up to and including R500 000 and thereafter 5% for purchase prices up to and including R1 million. For a purchase price R1 000 001 and over the Transfer Duty is R25 000 plus 8% on the value Legal persons pay a flat fee of 8% of purchase price in terms of Transfer Duty.

By choosing Mortgage Plus for a loan, you will get professional advice to make sure you are getting the best deal possible.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

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