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What will my monthly bond repayment be?

Budgeting in general can present major headaches for people but a bond repayment calculator, if used correctly, could help to ease the pain. Coming up with a realistic budget — whether for the purchase of a new home, or for the necessary control of household and monthly expenses or the entire expenditure plan for a whole country — can bring its fair share of headaches, even when you know it will be implemented in the most skilful and savvy way. So, don’t feel disheartened: you’re not alone if you’re facing the tiresome task of working out your budget.

If you’re planning on buying a house, you’ll need to know how much you can budget to spend on the loan each month. And you’ll need to know this before you go house hunting if you want to avoid disappointment. Imagine spending valuable time finding a dream home, only to discover that it is out of your price range! Luckily, Homeloan Junction offers you a simple, online tool to make this easier for you. Try their free bond repayment calculator to see if you can afford the house you love

How a Bond Repayment Calculator Works

When you are shopping for a new home, the last thing you want to discover is that the amount you thought you could afford is actually quite a bit different to the amount you can realistically afford each month. It’s best to find these things out before you go charging headlong into the process – and certainly well before you sign any Offers to Purchase.

Nowadays you can explore your options in the privacy of your own home, with the help of a bond repayment calculator. Having the benefit and independent use of an accurate bond repayment calculator in front of you, can help you create a more realistic assessment for the way forward. Remember, when you make your calculations, it is important to take into consideration that financial circumstances can change, so be sure not to stretch your budget too far.

Go ahead and test the bond repayment calculator tool on Homeloan Junction’s website. You’ll see that in less than one minute you will be able to quantify the amount of the bond you are eligible for … and the amount you can realistically afford.

Easy-To-Use Bond Repayment Calculator

You also have other calculation options over and above the bond repayment calculator available at your fingertips. With the useful calculators on the Homeloan Junction website, you can work out how much you will be able to afford to pay, you can project bond and transfer costs, and also work out how much you could save on interest with a bigger deposit. The website is well-optimized which means you’ll experience no problems with speed, and you’ll have the answers to your questions in a few minutes. Also, the calculators are simple to use.

Whether you are working out a budget that includes a new bond or re-evaluating the way forward with existing bond repayments, after spending a few minutes with these versatile tools you will soon see that they are quite easy to navigate and apply to your own, individual needs.

Save More and Pay Less

The most successful and accurate assessment of how much you can afford on a homeloan will come from thoroughly doing your homework. Don’t stop once you’ve assessed how much you can afford to pay as a monthly instalment, research as much as possible about the methodologies that can be applied to see you save more and pay off your bond in the shortest period possible. Banks in general are happy to see you stay with them for longer; after all you are generating streams of income for them. But will this really work for you?

A successful trick is to pay off your homeloan over a shorter period, but this entails a disciplined approach. Prioritize this expenditure and also seek new ways to add a bit extra to your repayment schedule. This is another reason to keep your budget realistic – give yourself the option to pay more into your mortgage each month, allowing you to save more and pay less.

Do you need assistance in determining your ideal homeloan amount? Even if you have used the useful bond repayment calculator to find out how much you can afford, you can also talk to one of the qualified and experienced consultants at Homeloan Junction to help you make accurate assessments.

Inside Tips on getting your homeloan approved first time

Let’s face it, particularly in the South African context; securing a homeloan in order to purchase your first home can be quite scary. Do you even qualify? Most men and women dream of settling down and starting their own family and to have their very own home in which to do this. The bad news is that the challenges of meeting the criteria as a first-time and successful applicant have increased. Does this mean you won’t qualify?

Here are 5 insider tips to help you to secure the homeloan that will help you buy your dream home:

Tip #1 Create a Record of Good Standing
Many first-time applicants have had their home loan application rejected. Why? The problem lies in the fact that young applicants have no credit record and history of their ability to pay promptly and consistently. So, in spite of having saved for a deposit with the bank, you may not be able to secure that homeloan simply because you have no other loans. Before making an application, spend some months creating a good credit history by paying smaller loans on time, like your cell phone or clothing accounts.

Tip #2 Generate Financial Discipline
While the country’s leading lending institutions and major estate agents warned against this, the government under Thabo Mbeki was determined to and ultimately succeeded in relaxing credit access rules and lending criteria. There are two ironies in this. One; Mbeki’s Minister of Finance (who did not have jurisdiction over these rulings) was openly opposed to the relaxing of previously prudent credit rules. Two; while the banks were initially sceptical when the laws were quickly passed, they obligingly processed new applications and granted them. This proved to be a disaster waiting to happen. The trick is to have financial discipline – don’t accept just any offer of credit. Make sure that you can afford the repayments first. This way you won’t be in any danger of being blacklisted.

Tip #3 Make Formal Inquiries with Home Loan Junction
Today, the homeloan application process is relatively simple and straightforward, and most South Africans with access to computers, laptops, mobile devices and the internet, can self-test while completing a pre-application. Correctly, banking criteria still prefer the first-time applicant (or any applicant for that matter) to make a formal application and ideally with one of our officials in person (although the application can, in certain instances, be made online). Invariably applicants are reminded of, or advised on what records and documentation are required to make inroads towards a successful application.

Tip #4 Ask About Options and Opportunities
In reaction to the disastrous effects of the relaxation of credit lending criteria, the government initiated new legislation which saw the founding of the National Credit Regulator which essentially acts as a watchdog for both clients and lenders. This has also made the homeloan application process more difficult for many applicants. But, today there are still companies, particularly new entrants to the personal and home lending markets, arguing in favour of more flexible, merit-based and opportunistic rules. Their argument is sound because if more people have access to credit within the parameters of properly regulated checks and balances, of course, the country benefits economically as a whole.

Tip #5 See What You Can Afford
Let it be known that all is not lost for new applicants. Homeloan Junction leaves them with some clues on how to go about securing their homeloan successfully. As a bond originator and not a traditional lender, We promises a speedy delivery of services ideal for helping you plan ahead of time. The emphasis is also on savings and tools which are available online to help you assess affordability and whether you qualify for a first-time loan. We also offer innovative alternatives to traditional bonds which could see you paying far less in the long term and also paying off your loan over a shorter period of time.

Tip #6 And Learn How Much You Can Save
For more information on whether you meet all criteria and what you can do next, you can contact Homeloan Junction directly online. Our service and advice is free.  Blog posts on our website have important information on what influences first-time home buyers.

In view of all the challenges, expectant applicants should have realistic objectives. With enough information on the home buying process, and with online calculators at their fingertips, there is no reason why South Africans cannot plan and succeed in buying their home at their first attempt.

Part of our service entails good advice based on experience and qualifications. Talk to Homeloan Junction today about how you can successfully secure your loan. We have contact with banks and conveyancers and knowledge of the products, and various credit terms available to advise you of all the options which will best serve your requirements.

How better to serve your needs than to approach a company who will, on your behalf, motivate and negotiate one of the most important deals of your life? Homeloan Junction is a one-stop service complete with efficiency and convenience at the tips of your fingers.

Yours in Property

To Buy or not to Buy? How to make the choice right for you…

I have been trawling the property information keeping myself up to speed with developments. There is a gloom in the economy, but fortunately the property sales and mortgage business is not in the doldrums. Affordable housing has looked good for years and developments continue in many areas of the country. It has probably been the manner in which the SARB has guardedly raised rates that has keep the property market on an even keel. Let’s hope it stays that way; boom and bust is disruptive and we cannot afford disruption in a national asset being Residential Housing.

The question often comes up, especially from First-time Homebuyers, is this the right time to buy? In other words, To Buy or not to Buy? – that is the question.

The answer is always the same for me: Do you think the cost of building is going to go down? If the answer is Yes, then wait. If the answer is No, then buy. Let’s explore this issue in a bit more depth.

Inflation, on a global scale, has been kept in check very nicely. Some of the major countries, Japan noteably, have reduced interest rates to historic levels on the back of close-to-zero inflation. Costs of production have been driven down by the Asian countries and currencies have been relatively stable for many years. In the past year or two that has no longer been the case and currency fluctuations and even devaluations, have become the norm. As we’ve mentioned before, thank goodness for the low oil price.  So the inflation story sounds quite benign until it comes to building costs. News24, on 20 February 2015 reported, Building costs have continued to increase by more than the average consumer price inflation rate over the past 15 years, according to Jacques du Toit, property analyst of Absa Home Loans. The latest Absa residential building review compiled by Du Toit shows the average building cost of new housing constructed came to R5 828/m² in 2014, which was 12% higher than the cost of R5 205/m² in 2013. The building costs are affected by a number of factors such as building material costs, labour costs, transport costs, equipment costs, land prices, rezoning costs, developer and contractor holding costs and profit margins.

That insight answers the first question and clearly, building costs are not reducing and frankly, seldom have. I guess the question then is, what should I be buying?

Think about the following:

Affordability
Don’t buy what you cannot afford. The bank will help you with this and strictly test your income and expenditure in terms of well-known affordability guidelines laid down by the National Credit Regulator. Do an affordability calculation to see what you can afford to buy.

Improve or Buy
Buying and selling homes is an expensive affair. As a rule of thumb, knock off 20% – 30% of the price of your new home for costs. Transfer and estate agent commission could already be about 12% and then bond settlement and registration costs and furnishings add to the tally. Improving instead of buying could prove much cheaper and convenient.

What to buy
If you’re going to buy, buy wisely. For normal family living, close to shops and schools, proximity to work, sport and social events makes eminent sense. Remember, what you like or don’t like as a normal consumer probably counts for many others’ opinions as well. It may be cheaper next to the highway but probably all the b
uyers agree that you can’t hear yourself talk in the garden. Then, if you can afford it, take some advice from my late Uncle – there are two strips of land that are scarce, along the coastline and along the top of a mountain range. Houses in these two places carry and hold a premium in the long run. I am also a proponent of secure estates and, in particular, golf estates. Secure estates for the obvious reason of enhanced security but golf estates, in addition, give you lifestyle for the family. And remember, few additional golf estates are being developed – they are just too expensive and water is becoming a serious problem – thus adding to the scarcity value.

Future plans 
Don’t put yourself through the trauma of moving twice! If you have your eye on emigration, a job in another town or a particular suburb or estate, don’t buy now. Wait until you can settle and then sell and settle in the new environment. By the way, building can be a real pain and you would be a rare person to not have a “builders story” after completing your house. The same can be said for renovation but it is normally on a smaller scale.

Investment or not 
Robert Kyosaki [of Rich Dad Poor Dad fame] is quite right when he says that an asset that does not produce income and requires maintenance and services, is actually a liability. In fact he goes so far as to say, buy and rent a factory and let the factory buy the house from nett rent. But most of us don’t live there and we get great pleasure from owning a property and knowing it is the domain of our family. For this reason, the comments about What to Buy become really important. You would at least look to capital appreciation to offset the costs when you sell the property so choose the Location well. This section particularly applies to “that little house at the sea”. Truth is that we could do well, in most cases, to rent or use a guest house for our holidays, rather than battle financially to pay off a second home.

If you think you can afford it, buy now. Be wise and look around. Consider all your options and do your best to think ahead a few years. But, I would posit, do not delay too long if you can afford to buy now.

And always remember Homeloan Junction is there for you. Dealing with us is free. Yes, you read right – free. And we’ll back that mortgage service up with sound advice and expert knowledge.

 Yours in Property.

Take control of your monthly expenses today! [Free HLJ Budget Tool]

Funny how things happen at the same time!

In this post we will give you our Homeloan Junction Budget Tool and refer to a Moneyweb Today article. The Moneyweb post arrived just as I put the finishing touches to the HLJ Budget Tool. Serendipitous, I would say!

So why the Tool?

Most of us don’t have a budget. We live from hand-to-mouth, month-to-month and while away our time and our money on necessities and fancies. The danger is that as this forms a habit pattern, we wonder where the money’s gone and why there’s so much month. Month after month, year after year, we live as if there is no tomorrow financially. Often, if we’re really honest with ourselves, we take on bad habits in the process – we eat, drink and smoke too much. After all, life is stressful, you know. Then, we may rack up some unexpected medical bills in the process as we get older. All part of life, you know.

6% of South Africans can retire comfortably. In case you wonder about the other 94%, they don’t retire comfortably by level of degree.

What we mean by that is that the next 6 % below the “comfortable 6%”, live a little less than “comfortable”. Starting to experience the world of retirement myself a little, I have family in their 80’s. Retired since age 58, 25 years later they’re finding prices very high. Thank Goodness, they have not squandered their money but things are tight – much tighter than when they retired.

What we learn from this is that retiring with income that rises, or is supplemented with assets that may be sold, is wise financial planning. So, the next 6% behind the second 6%, is probably already not ready to retire at all in South Africa; of a truth, the situation quickly becomes dire and a Government pension of about R1600 per month, rising at 6-7% per annum, does not satisfy even basic needs.

Everything in our beautiful, tortured country points to sadness as we ponder these thoughts. My wife read me an article the other day that said one of the greatest gifts you can give your children is to not be a burden to them in your retirement. Oh may that be a simple goal for you when you finish reading this blog!

Get the full Moneyweb article here – MONEYWEB-TODAY-ARTICLE.pdf

Using elementary Excel, I have created a Tool for you to budget. Customise it for your own circumstances and please note that the numbers are just examples, so put your own in.The Tool allows for your Gross Income. It then deducts your direct expenses like UIF, Income Tax etc to arrive at your Net Income Before Expenses.

Then it deducts two kinds of Expenses: Need To Have’s and Want To Have’s. Call them what you want and re-arrange the items as you wish [after all, we need a little retail therapy or entertainment some time J] but just be true to yourself. Question what you earn and what you spend honestly. Commission earners especially project their earnings – like true sales people, they often believe they are going to earn more and spend less than they really do over the long-run. Don’t fool yourself. And, if you really want to test your reality, then commit to an extra amount repaid monthly on your bond and see how good you are at sticking at it.

You can download your copy of this tool here –HLJ-Budget-Tool.xls 

The point is, every few hundred Rands you save in this exercise could literally put you into the top 6% at retirement. And, keep you there.

 Now to the final points……….

1. I am not a financial advisor, so speak to yours and begin to commit to a long-term savings plan. Retirement Annuities, Satrix, DBX’s etc are great vehicles to discipline your savings. And, by the way, remember some Life and Disability cover for those you love, if you don’t make it.

I have tried to teach all financial levels of people the simple fact of compounded interest. By the way, Albert Einstein called it his “most profound” learning. Two elements for now:

  • R100 invested for 10 years and 20 years at 8% is R18294.60 and R58902.04 respectively. The compounding is not a straight line as interest on interest continues to kick in the more you save.
  • The inverse of this, which the Insurance industry correctly calls “the cost of delay”, is that if you want R60000 , then the faster you start saving the less you have to save. R60000 costs you R101.86 over 20 years and R327.97 over 10 years, both at 8%.

2. I am a banker, so back to the tired old truth that your bond is a good place to save. Whatever interest you save is at your bond rate after tax.

For example, at a bond rate of 10%:

Bond: R80000
Years to go: 20
Repayment: R7720.17
Total Paid: R1852841.56
Interest spent: R1052841.56
Payment increase of 20%: R9264.21
Years to pay: 12.83 years
Total paid: R1426688.00

Original total payment less new total payment: R1852841.56-R1426688.00 = R426153.56

SAVING AFTER TAX: R426153.56

Homeloan Junction cares. This blog may seem trite and simplistic to some. To others, it may just be the spark of new financial life. If it touches one life today then the last two hours writing and calculating has been worth every minute.

Yours in Property

Homeloan Calculator

Buying your First Home? Have a look at our Home Loan Affordability Calculator and Get in Touch to see how we can help you –https://www.homeloanjunction.co.za/calculators/affordability

Home Loan Deposit Saving Calculators

Home Loan Deposit Saving Calculator -Use the savings calculator to work out how much you need to save and for how long, to save for a deposit for your home loan. www.homeloanjunction.co.za/calculators/savings

How much interest are you paying?

How much interest are you paying?
Our amortisation calculator shows you how much of your bond installment goes towards interest and how much towards reducing the actual home loan amount – www.homeloanjunction.co.za/calculators/amortization