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Bond repayment Calculator |
Car repayment Calculator |
Compound Interest Calculator |
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Bond Repayment Calculator:
Its fast and effective at
calculating your payments into your Bond. You can also see your payment schedule
and what you have to pay per month!
Your Bond can make or break your financial situation, we are here to help you
see the bigger picture of
what your home actually costs. |
Car Loan Calculator:
Calculate how much your payments will be for your new wheels, you can use our
quick car peyayment calculator and check your car loan obligations. Free and
Fast car payment calcualtor
Cars depreciate the moment you purchase them, this calculator will help you see
how much you are actually paying for your vehicle. |
Compound Interest Calculator:
Work out how much you can save with compound interest. This calculator will give
you a good idea about the value of your South African Rands.
With a bond you owe the bank money, with compound interest the bank pays you
monthly to keep your money! Sounds good! |
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| Mortgage Bonds, how they work |
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This article is all about home loans and how they work, In South Africa many people try to secure a 100% bond, this may be a bad idea unless you earn a high salary and even then I would not advise this! Most banks actually want to give you a loan, they want you to take the highest loan possible provided you qualify for this under the new national credit act and provided you can pay them back over time.
Before you buy
Before you sign an offer-to-purchase, you need to be sure about what you will be paying back on your home loan, remember that some bank dont even offer a 100% loan and you will be required to put down a healthy deposit should you not qualify for such a loan. If you for example put down R 250, 000 and you still needed a further R400,000 you would still need to be assessed for the lesser amount. Your credit record must be good, you must provide payslips that show your monthly salary, you must remember that you cannot cannot be living beyond your means already!
The Offer-to-purchase
Once you find a home that you like you would approach the seller and make an offer-to-purchase, if the seller agrees to your offer an agreement would come into existence. This agreement is only valid if you can secure a loan from the bank for about 70% - 80% of the full price. After you have a sales agreement you would approach a bank or home loan consultant and try to get the loan in question.
The bank will check your credit and look at your monthly salary and also look at what others debts you may have. They would also send somebody to the actual property to check and evaluate it.
The mortgage bond
A mortgage bond comes into affect when it has been registered at the Deeds office, it is a formal document that basically allows a bank to take ownership of your property should you default on payment. The bank will then sell the property to regain the loaned amount, this is known as a foreclosure.
Banks are generally quite understanding towards your financial situation, if you schedule an appointment and go and see a consultant you could extend your due payment for any given month, at the same time bank show no mercy if you are constantly late and will often see you as a "Bad Debt"
What can you afford to pay?
If you can afford it, make an additional bond installment every month, this will allow your interest payments to decrease over time. So if you have some spare cash it is advised to put it into your bond. If your company pays you a bonus dont go on holiday, put that money towards your bond.
Another tip that may help you to pay for your home is to shorten your payments, this means you take your mortgage bond out over a longer period. This however is sometimes this is not possible depending on your salary and what you can afford to pay every month. Since the introduction of the national credit act, you actually cannot pay more than a certain percentage of your salary into your bond. If for example you earn R100,000 per annum, you will only be allowed to pay a maximum of R2,500.00 into your monthly bond. This is always 25% of your gross income.
You can however apply for a loan on your joint income (You and your Spouse) this will allow you up to 30% of your gross income.
How much of a loan should you get?
Depending on what you can afford, I would suggest having as much as 40% deposit on any property, the reason I say this is due to the overall affect of interest on a higher loan, the more you borrow the more you will end up paying back over time.
Example 1. You take out R.700,000 with no deposit at 9% interest over 20 years
Interest payed: R. 811,539.61
Example 2. You take out R.400,000 with no deposit at 9% interest over 20 years
Interest payed: R. 463,736.92
Notice that for the first loan you payed R. 811,539.61 in interest to the bank, in the second example you pay R. 463,736.92 to the bank. Scary stuff!
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| mortgage, bonds, home loans, |
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Bond Repayment Calculator, Car Loan Repayment Calculator , Compound Interest
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