The concept of taking out credit has gotten a bad rap in recent years, following the subprime mortgage crisis in the US and rising levels of indebtedness in South Africa.
However if credit is used in a constructive way, it can prove to be a vital tool in building wealth creation for the future.
Wouldn’t it be lovely if the price tag on your new home was all you had to pay? In reality, there are several hidden and not-so-hidden costs associated with buying property. Here are some of the major expenses, to help you prepare.
A credit report reflects your financial health: what you spend your income on, whether you can afford the debt you have, and whether any lender has taken legal action against you for non-payment.
In fact, according to experts, a good record of servicing debt is your most important asset when buying a house. This is because it’s the first thing banks look for when considering your bond application. Based on your creditworthiness, a lender can then decide whether to approve your application for a home loan.
38% of bank approvals are currently subject to a lower offer - there is therefore an increasing need for homebuyers to have a deposit available for a successful application.
The approval and ultimate conversion rate on a 100% LTV bond application is significantly lower than a 90% or lower LTV bond.
An access bond is a home loan that allows borrowers to pay additional funds into their home loan account, over-and-above the required monthly bond instalment, secure in the knowledge that if they require the funds, they can withdraw them again. It is a tax free savings mechanism and the additional funds can be withdrawn at any time.
An expert takes pride in his/her professionalism and would never prejudice service delivery to the homebuyer, lead provider or the banks by submitting an application to a bank/s without the required relevant bank’s minimum document requirements to support the application, which has been verified to the information captured...
A shortfall occurs when a Building Bond is registered for a lesser amount than that of the builder’s contract / tender amount. In order to mitigate the risk the customer must have access to sufficient funds to cater for the difference. Often homebuyers are unable to meet this requirement post registration and transfer as they have not taken this into account, resulting in delays.
Homeowners can reduce the term of their homeloan and the total that they pay in with careful budgeting and clever tricks. A house is usually the biggest asset that you will buy in your lifetime, but it's made affordable by the 20-year term of monthly repayments...
You’ve found your dream home, made an offer, it’s been accepted and your bond has been approved. It’s all extremely exciting, but there’s still a lot that has to happen before you can collect the keys and move in.
There are many benefits to putting down a deposit for your first home, but in today’s tough economic climate, it may be more realistic to take out a 100% bond. How do you decide what’s best for you?
Prospective home buyers who obtain a prequalification certificate are doing so much more than just finding out how much they can afford to spend on a house. They are also acquiring a certificate that will build trust between all parties, including the agent and the seller.
According to the Credit Bureau Monitor's 2010 4th quarter report only 53.3% (9.90 million) of the 18.51 million credit-active consumers in South Africa were classified as in good standing...