Mortgage & Property Talk SA
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Our Mortgage Experts specializes in First Time Home Buyer Loans, New Home Loans, Building Loans, Further Home Loans, Bond Switches and Mortgages throughout South Africa. Click Here to go to The Mortgage Plus Website.
We offer a wide range of advice on different home loan options - 0861 11 11 93*
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Bond Calculator Objectives | Bond Calculators
The most common calculation objectives when using bond calculators are calculating monthly bond repayments & interest, determining levels of affordability, calculating the income qualification benchmark based on a required bond amount and analyzing optimal bond repayment options.
All of these objectives can be met by using our bond calculators. We also provide additional bond calculations which enable users to calculate sensitivities around the main bond variables – interest rates, bond periods and deposit amounts.
A comprehensive transfer and bond cost calculator is provided to assist in calculating an accurate estimate of the bond and transfer costs that will be incurred when purchasing a property. Our bond calculators also feature an amortization table which includes a column for the outstanding capital percentage – this calculator is well worth having a look at and is guaranteed to enhance any user’s understanding of how the outstanding capital amount is repaid over the entire bond period.
All our bond affordability and minimum income calculations are based on net disposable income as required by the National Credit Act.
Home Loan calculators helps to detail you the exact information related to your saving investment.
Mortgage Plus Bond Originators Recommend the Following Calculators:
This bond calculator will show you what your monthly instalments will be and what monthly income you need to secure the loan.
Use this Bond Calculator to work out what is the maximum amount you can borrow according to your income
Use this Bond Calculator to work out what your monthly repayments will be.
This bond calculator shows you how much you still owe on your Home Loan, as well as how much Interest and Capital you have paid.
This bond calculator will show you how much you can save by increasing your monthly installment. You will see how the repayment term shortens as well as the total savings in interest.
Please contact us if you require any further information or would like to apply for finance:
Complete this short form online
011.327.4489 / 0861 1111 93
morne@mortgagepluscc.co.za
www.mortgagepluscc.co.za
How much can I borrow for a mortgage?
One of the first questions everyone asks when they are thinking of buying a property is ‘how much can I borrow?’ This is not an exact science and all banks have methods to calculate affordability. Since the introduction of the National Credit Act, this has become even more complicated. The most accurate method of establishing how much you are eligible to borrow is to contact a qualified mortgage broker – 011.327 .4489
Salary Multiples
A mortgage lender will lend you money based upon what they think you can afford to repay on a monthly basis. The calculation they used to use is broadly that 30% of your gross monthly income must be your maximum monthly mortgage repayment. Therefore if you earn R20,000 per month gross then your maximum repayments should be R7,000.
Under the National Credit Act, lenders now have to base your eligibility calculations on your monthly ‘disposable income’. To calculate this you need to take your gross income, less all the deductions like tax and UIF to get your Net income. They then calculate what your total monthly expenses are; groceries, car insurance etc, and finally they subtract all you month commitments to any existing debt you have such as credit card, vehicle finance, or loan repayments. The balance (if there is one) is your maximum monthly mortgage repayment.
The banks normally add in a ‘buffer’ for interest rate rises etc, so you may actually only qualify for 85% of this figure. You then need to work backward to get the actually bond amount these monthly payments will allow you to service.
A lender will look at your bank statements and your regular outgoings to check that the expenses you have declared are in line with your outgoings on your bank account. They also have access to the Credit Bureau’s information so they can check that the liabilities that you have declared are correct. If you run a tight ship with regard to your finances, you may be able to get a bigger mortgage than you would do under the traditional salary multiple guidelines. Conversely, if you’re already ‘maxed out’ with credit cards and personal loans, you may not get offered as much.
The National Credit Act (NCA) means lenders will be tightening their credit policy so as not to fall foul of the ‘reckless lending’ as laid out in the Act. This will not only mean that lenders will start using individuals net income for their calculations, but also they will look specifically at what other borrowings the applicant may have before they make a decisions on the applicants borrowing eligibility.
For a quick check to see how much you are eligible for please go to our mortgage calculators. The various lenders do vary in how much they will lend you depending on their individuals assessment of your risk.
Other Income
Lenders will take into account other income that you may have such as rental income, investment and dividends etc. Again, lenders do vary in how they view secondary income streams. Therefore you should always speak to your Mortgage Plus consultant to assess your full range of options.
As a rule of thumb lenders will take into account 50% of your rental income on a rental property. It is up to you as the borrower to prove this income. You must be able to show money going into your bank account and lease agreements. The longer the lease, the more they will value the rental income.
You can also take into account ‘contributions’ from other family members if they are living in your property. If a partner, or child is making a contribution to the ‘family finances’ then the banks will use it. Again, the onus is on you as the borrower to prove this.
Commission earner
If you are a commission earner the banks will take this into account. However, the best way to prove this to the bank is to provide six months payslips and calculate the average commission earnt.
Annual bonuses
These can also be taken into account but you will have to prove them with entries on your bank statements and letters from your employer.
Self-employed individuals
It is harder for banks to lend to self-employed individuals because it is often harder to prove the income. The better you manage your accounts (and the more accurately) the easier it is for the banks to lend to you. Proof of your income will have to be provided in the form of Audited Financial Statements, latest management accounts and six months bank statements, as well as a letter from your accountant verifying your income.
Partners / Spouse’s income
If you are purchasing with a partner or spouse then lenders will take their income into account.
Note: Remember that banks want to lend money. That is how they make money. The banks have come under considerable pressure since the introduction of the National Credit Act not to ‘lend recklessly’. Make it easy for a lender to grant you a loan by managing and recording your finances carefully.
Please contact us if you require any further information or would like to apply for finance:
Complete this short form online
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