Homeowners with large stands are increasingly selling off parts of their property to reduce their home loans, achieve greater security and lower their maintenance costs and property rates.

And the trend is being fuelled, says Berry Everitt, CEO of the Chas Everitt International property group, by local authorities keen on densification and getting better usage out of existing infrastructure.

“In addition, there is relatively high demand now for empty stands in well-established suburbs, from buyers who want to build modern homes but still live close to town centres.”

However, to derive the most benefit from such a move, sellers must ensure that the sale agreement specifically stipulates who is to pay the costs of subdivision, he says.

“These costs include the fees for a surveyor to draw up the necessary SITE diagrams, as well as those for council approval and for electricity, water and sewerage connections to the new stand – and can amount to several thousand rand.

“And while it is quite likely that the buyer will agree to pay for the subdivision in return for a lower land price, the sale agreement must then make this absolutely clear – otherwise the law will simply assume that the seller, as the original owner of the property, is liable.”

CONTACT US
For more assistance with regards to Applying for Home Loan Finance .
Email: morne@mortgagepluscc.co.za
Ph: 011.327.4489
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South Africa - The Reserve Bank unexpectedly announced a 0.5% cut in the repo rate. This means a drop in home loan payments, but on the flip side a cut in your cash interest rates.

Using the Absa home loan calculator shows that on a R1m home loan your payment would drop from R9 983.80 to R9 650.22 as the prime interest rate drops from 10.5% to 10% (assuming your home loan is at prime). This is a saving of R333.58.

Carl Fischer, the executive responsible for marketing and external communication at Capitec Bank, said the bank would cut interest rates “as soon as possible… we might hold out till month-end”. Absa has announced that its prime rate will drop 0.5% from March 26.

Using Capitec’s savings calculator, in an assumed situation of saving R1 000 per month a 0.5% cut in interest rate (from 6.25% currently for balances higher than R10 000 to 5.75%) would mean that you would earn R28.43 less interest over a year. At 6.25% one would end up with a final balance of R12 349.79 versus R12 321.36 at 5.75%.

A pensioner called Moneyweb earlier saying he has about R700 000 in a fixed deposit with Capitec. The maximum interest rate he could earn is 10.28% on a lump sum option for 46-60 months. He mentioned that it is coming up for renewal soon, so one may assume a 0.5% cut in his return to 9.78%.

This means his annual interest drops from R71 960 to R68 460.

The time to buy property is now, the banks are more relaxed on their credit criteria’s, and the prime interest rate dropped today to 10 %. So what are you waiting for ! ! !

CONTACT US

For more assistance with regards to Applying for Home Loan Finance .

Email: morne@mortgagepluscc.co.za

Ph: 011.327.4489

or Complete This Online Form