Today, reserve bank governer, Gill Marcus, announced that the repo rate will remain unchanged at 7.00%. This means that the prime home loans rate will also remain unchanged at 10.5%
What would a cut of 0.5% mean in your pocket?
To put it in simple terms, a home loan of R500 000 at prime (10.50%) over 20 years would work out to +/-R4,948 pm (excl insurance).
If you were able to get a home loan rate of 0.50% below prime, or 10.00%, that would mean your installment would be R4,785 - a saving of R163.00
These amounts would be doubled up in the case of a R1 mil home loan.
So at the moment that home loan would cost +/- R9,897 pm, and with a 0.5% cut it would be R9,570 pm, a saving of R327.00 pm
These amounts may not seem significant, but if you take it over a year, that's a saving of R3924, and that's NOT INCLUDING INTEREST!
If you put that R327.00 back into your home loan on a monthly basis, you'll pay off your loan in 18.16 years and not 20 years.
Doesn't seem like much? Further consider this... the interest on that home loan will reduce from R1,316,051 to R1,167,953 - That's a saving of almost R150 000 over the period of the loan!
All because you put that additional R327.00 back into the bond every month.
Imagine what would happen if you made that R500?
Want more tips and tricks on how to reduce your rate on your home loan or for a refinance home loan, please don't hesitate to contact me through www.gpfmortgage.co.za/contactus.html
Tuesday, January 26, 2010
Wednesday, January 20, 2010
Banks Cutting out Discounts
Clients are reeling because some of the banks, namely Standard Bank as well as ABSA are not letting originators choose the attorneys that will register the bonds anymore.
The implications?
Many originators that have been in the business a long time have built up relationships with certain attorneys. What many have done was to have an agreement in place that if they referred a client to that attorney to attend to the bond registration the client would receive a substantial discount.
These discounts were even up to 50% of the attorney's fee, which ensured a big saving for the client.
For instance, on a R500 000 bond, if the the client got a 50% discount he would only have to pay the attorney +/- R3078, now, that amount doubles up to R6156.
You can further double up that amount on a R1 000 000 bond.
If the bank chooses the registration attorney, the originator has no relationship or agreement in place, which means the client loses out.
Where will this end?
The implications?
Many originators that have been in the business a long time have built up relationships with certain attorneys. What many have done was to have an agreement in place that if they referred a client to that attorney to attend to the bond registration the client would receive a substantial discount.
These discounts were even up to 50% of the attorney's fee, which ensured a big saving for the client.
For instance, on a R500 000 bond, if the the client got a 50% discount he would only have to pay the attorney +/- R3078, now, that amount doubles up to R6156.
You can further double up that amount on a R1 000 000 bond.
If the bank chooses the registration attorney, the originator has no relationship or agreement in place, which means the client loses out.
Where will this end?
Tuesday, January 12, 2010
How to Boost Your Credit score When Looking for a SA Home Loan
SA Home Loans: When looking for a home loan it is important to try to increase your credit ranking. In general, the better your credit standing, the more beneficial credit terms you'll get.
When you have had a low credit standing you'll be at the mercy of the banks who will be able to charge you interest rates way above prime.
Fix Errors On the Credit reports
The two biggest credit agencies in South Africa namely, Trans Union and Experian. So the first thing you should do is to get a free credit report and search for for errors in your record. You should act right away to get it fixed, because if you apply for any kind of SA home loans your lender isn't just going to take your word for it that there are mistakes on your credit report.
You should not Apply For Debt When Applying For SA Home Loans
Do not make the mistake of running around and applying for credit cards or car financing until after your home loan is approved. Remember that looking for new credit temporarily brings down your credit score.
Pay Your Debt That's Near The Limit
Credit balances which are over 50% of your credit limit brings down your credit score. In general, try and keep balances below 50% but for optimum benefit try to keep balances below 30% .
To put it differently, if your credit limit is R10, 000, attempt to bring the balance right down to R3, 000. This will help to boost your credit score. Your credit score will increase immediately once your balance is decreased.
For the best results one could clear your credit card debt in full each month. However, don't close your accounts, since that may lower your credit score. What’s key here is the % of your total credit which you're using. The lower it is the better.
Pay Your Accounts on Time
Please don't make late payments. Paying your bills before its due is one of the simplest ways to increase your credit standing. It shows the bank that you take your responsibilities seriously and that they can expect to be paid on time also if they grant you mortgage finance.
So, its not that impossible to give your credit rating a boost, but the biggest thing is that you have to take steps .
When you have had a low credit standing you'll be at the mercy of the banks who will be able to charge you interest rates way above prime.
Fix Errors On the Credit reports
The two biggest credit agencies in South Africa namely, Trans Union and Experian. So the first thing you should do is to get a free credit report and search for for errors in your record. You should act right away to get it fixed, because if you apply for any kind of SA home loans your lender isn't just going to take your word for it that there are mistakes on your credit report.
You should not Apply For Debt When Applying For SA Home Loans
Do not make the mistake of running around and applying for credit cards or car financing until after your home loan is approved. Remember that looking for new credit temporarily brings down your credit score.
Pay Your Debt That's Near The Limit
Credit balances which are over 50% of your credit limit brings down your credit score. In general, try and keep balances below 50% but for optimum benefit try to keep balances below 30% .
To put it differently, if your credit limit is R10, 000, attempt to bring the balance right down to R3, 000. This will help to boost your credit score. Your credit score will increase immediately once your balance is decreased.
For the best results one could clear your credit card debt in full each month. However, don't close your accounts, since that may lower your credit score. What’s key here is the % of your total credit which you're using. The lower it is the better.
Pay Your Accounts on Time
Please don't make late payments. Paying your bills before its due is one of the simplest ways to increase your credit standing. It shows the bank that you take your responsibilities seriously and that they can expect to be paid on time also if they grant you mortgage finance.
So, its not that impossible to give your credit rating a boost, but the biggest thing is that you have to take steps .
Tuesday, December 29, 2009
Beware of Hidden Home Loans Costs
By Zulika van Heerden
Home Loans: At some point or another we all, except a fortunate few, need a home loan to be able to purchase a property.
In addition to the monthly installments there are also other costs you need to be aware of. What are these costs?
There are at least 4 additional costs to keep in mind after you purchase a property:
1 - Rates and taxes (utilities)
These are calculated on a monthly basis and varies according to your use of water and sewrage facilities, it also includes refuse removal and the largest portion is calculated according to the size of your plot.
2 - Home Owners Insurance
This is an insurance that covers you if there are damages to your property caused by storms or other natural disasters. The bank or lender will always suggest you use their insurer, but you don't have to because these are often quite a bit more expensive than outside insurers, so be aware and shop around.
3 - Monthly bank fees
The bank or lender that has granted your home loan will also charge you a monthly fee to manage the account. The maximum they may charge according to the National Credit Act is R57.00. This fee will vary from bank to bank and will also be less, depending on the bank, if you use their insurer or more expensive if you use an outside insurer. However, the amount may never be more than R57.00.
4 - Life Insurance/Home Loan Cover
Life insurance or home loan cover is mandatory at most banks, so that in the event of the death of the breadwinner or spouse that both the bank and the remaining familiy members are protected. The bank is protected in that the entire bond is paid off (provided the life cover is sufficient) and your family benefit too because they won't be burdened with a monthly bond repayment.
These are the 4 major home loans costs that you'll encounter after purchasing a home - remember that when purchasing a sectional title property all the above costs, except for 1 and 2 are normally included in your levy, therefore you needn't worry about those.
For more information on home loans or other eye-opening articles please visit our website on: http://www.gpfmortgage.co.za/
Home Loans: At some point or another we all, except a fortunate few, need a home loan to be able to purchase a property.
In addition to the monthly installments there are also other costs you need to be aware of. What are these costs?
There are at least 4 additional costs to keep in mind after you purchase a property:
1 - Rates and taxes (utilities)
These are calculated on a monthly basis and varies according to your use of water and sewrage facilities, it also includes refuse removal and the largest portion is calculated according to the size of your plot.
2 - Home Owners Insurance
This is an insurance that covers you if there are damages to your property caused by storms or other natural disasters. The bank or lender will always suggest you use their insurer, but you don't have to because these are often quite a bit more expensive than outside insurers, so be aware and shop around.
3 - Monthly bank fees
The bank or lender that has granted your home loan will also charge you a monthly fee to manage the account. The maximum they may charge according to the National Credit Act is R57.00. This fee will vary from bank to bank and will also be less, depending on the bank, if you use their insurer or more expensive if you use an outside insurer. However, the amount may never be more than R57.00.
4 - Life Insurance/Home Loan Cover
Life insurance or home loan cover is mandatory at most banks, so that in the event of the death of the breadwinner or spouse that both the bank and the remaining familiy members are protected. The bank is protected in that the entire bond is paid off (provided the life cover is sufficient) and your family benefit too because they won't be burdened with a monthly bond repayment.
These are the 4 major home loans costs that you'll encounter after purchasing a home - remember that when purchasing a sectional title property all the above costs, except for 1 and 2 are normally included in your levy, therefore you needn't worry about those.
For more information on home loans or other eye-opening articles please visit our website on: http://www.gpfmortgage.co.za/
Monday, December 21, 2009
When last have you tried to apply for Home Loans?
Taken From: http://ezinearticles.com/?expert=Zulika_Van_Heerden
If you have ever wanted to apply for a home loan, now is potentially a really a difficult time.
Why do I say so you ask? Well with the recession just “officially” over, the banks have still not changed their risk-averse attitude, which means they’re not easily granting loans.
Firstly, before you apply for home loans, make sure you have a squeaky clean credit record. Any sniff of anything negative will cause the banks to decline the application.
Secondly, make sure you know which bank requires what percentage deposit. And if you do need one, make sure you have enough. Sometimes they will even ask for proof of the funds before they start to work on the application.
The application itself isn’t difficult, but it is the way the information is presented and what you say in your motivation.
The motivation is one of the most essential parts of the application as it “speaks” to the credit manager without him or her just seeing the black and white figures on the page.
If you approach a reputable mortgage broker for a home loan you would not need to worry about this because they would do it all for you.
Home loans are essential for home ownership if you do not have the cash to purchase a house. Essentially it’s where the bank gives you money to buy an appreciating (increasing in value) asset.
So, in conclusion, don’t take on the hassle on your own, let a mortgage broker do the legwork for you.
If you need more information about home loans or how to apply please visit our website at http://www.gpfmortgage.co.za
If you have ever wanted to apply for a home loan, now is potentially a really a difficult time.
Why do I say so you ask? Well with the recession just “officially” over, the banks have still not changed their risk-averse attitude, which means they’re not easily granting loans.
Firstly, before you apply for home loans, make sure you have a squeaky clean credit record. Any sniff of anything negative will cause the banks to decline the application.
Secondly, make sure you know which bank requires what percentage deposit. And if you do need one, make sure you have enough. Sometimes they will even ask for proof of the funds before they start to work on the application.
The application itself isn’t difficult, but it is the way the information is presented and what you say in your motivation.
The motivation is one of the most essential parts of the application as it “speaks” to the credit manager without him or her just seeing the black and white figures on the page.
If you approach a reputable mortgage broker for a home loan you would not need to worry about this because they would do it all for you.
Home loans are essential for home ownership if you do not have the cash to purchase a house. Essentially it’s where the bank gives you money to buy an appreciating (increasing in value) asset.
So, in conclusion, don’t take on the hassle on your own, let a mortgage broker do the legwork for you.
If you need more information about home loans or how to apply please visit our website at http://www.gpfmortgage.co.za
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