Purchasing a home will be one of your life’s major decisions that may prove to be either a sound investment or a big liability. The decision needs careful study and planning with lots of research if need be.
For first-time home buyers, this may look like a gargantuan task, but if taken step by step, it will finally hook the right house for the right price. The home will be a priceless treasure for you and your family packed with wonderful memories to last a lifetime.
Each lender or bank in South Africa has varying methods of arranging a loan, deposit, and interest rates. This article will talk about the traditional and fundamental bases and interest rates of a home loan.
Structuring a Mortgage
A principal sum is taken out by a lender and interest is then worked out, which will give you an idea of the amount that you need to pay them over the full term of the loan. Interest rates are the additional amount of money that you are indebted to the lender.
Let’s say you borrow R1 000 000 and the terms for repayment are for 20 years. If the interest rate is 10% (this may vary throughout the period of the mortgage), you are already committed to pay two loans to the lender: the principal sum of R1 000 000 and the interest for a 20-year period. Before any repayment has been made, you already owe more than R2 000 000 calculated in a year’s interest (R1 000 000) multiplied by the 20-year term of a mortgage.
Visit our “Bond Repayment Calculator” to work out what your total repayment amount, total interest and monthly repayment will be.
Amount to be Borrowed
Banks have different ways of calculating amounts that they lend out. The introduction of the National Credit Act has made it even more complicated. The best way to find out how much you will be entitled to borrow would be to fill out the online home loan application form on our website and let a particular bank work it out for you.
Homeside Home Loans is a mortgage originator and provides specialised consultations to potential home owners.
The services that Homeside Home Loans offer are as follows:
These consultation advisers have lists of the interest rates from lending companies and major banks which could be analysed and compared to fit your financial profile. They can provide better options to give you excellent financing home loans.
Personalised care is given by Homeside Home Loans that will take time to assess your personal profile and needs to give you the best interest rate for your home loan.
By filling out one application form, Homeside Home Loans consultants can then apply to a variety of financial institutions which gives you better options in choosing the right home loan that will work to your advantage. Homeside Home Loans does everything over the phone and email thus saving you the stress of applying for a home loan.
Homeside Home Loans will act on your behalf to negotiate for the lowest interest rates in the current bond market.
Always remember that banks and other financial institutions want to lend you money as this is how they make money, too. Just bear in mind to manage your finances well and choose the rate that works for you.