Mortgage & Property Talk SA
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How much home loan is right for you?
One of the biggest attractions of an investment in property is the fact that it is relatively easy to gear the purchase – that is, to use someone ease’s money to cover most of the purchase cost.
Lenders are happy because their loans are secured by bricks and mortar assets and, for the borrower, there is always the chance of a quick gain from rising property prices.
Consequently, borrowers are often tempted to go for the highest possible gearing ratio, with a low deposit and a high proportion of the property cost borrowed.
“But borrowers need to consider that a bigger deposit generally means a better chance of a home loan at the most favorable interest rate, and that the loan can be paid off or at least reduced more quickly – which means that the property owner will have a bigger capital gain when the time comes to sell.”
Before they go house hunting, potential buyers also need to determine what size loan they themselves feel comfortable about repaying.
“Financial institutions will determine the maximum they are prepared to lend based on the borrower’s credit record and current income and debt commitments, and with interest rates currently so low, borrowers may well find that they qualify for bigger loans than they anticipated.
“This does not necessarily mean, however, that they should immediately opt for a more expensive property or a higher gearing ratio. Determining what size loan is right for you remains a personal decision and should take into account your overall investment strategy as well as the property in question.”
The buyer of a newly built property, for example, may need less cash to cover transfer costs or improvements and be able to put down a bigger deposit, while the buyer of an older home may decide to take a bigger loan and keep some cash in hand to cover the costs of repairs and renovation.
“In general, though, it is good advice to put down the biggest possible deposit and keep the amount borrowed to the lowest level.
“And the final decision should only be made after careful consideration of the probable future trend of interest rates and after shopping around to ensure the best possible current rate on the loan.”
Here’s some calculators to help you make the right decision:
Increased Installments Calculator
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
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
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