Work out what bond you as a Purchaser should qualify for

The loan amount you can qualify for is limited by your monthly income and by your total disposable income. Only 30% of your income can be used to pay towards a home loan.

The National Credit Act has taken this one step further and banks are now required to ensure you have enough disposable income to support a bond repayment.  Thus the way in which purchasers are assessed has changed.

To work out how much you qualify for:

Calculate 30% of your monthly income:

ie: R30 000.00 per month will be R10 000.00 – the bond amount would be limited to a maximum of R10 000.00. You will then have to list ALL your current expenses, including fuel, petrol, school fees, etc and prove that you can in fact actually afford to repay R10 000.00 per month back.

 If after ALL expenses are deducted, you are only left with R6 000.00 then a bond with a repayment of R6 000.00 is all you will qualify for even though it is less than their 30%.  Also remember that the bank looks at your credit record – do you pay your accounts on time? Are you black listed etc.

The good news is that if you are currently paying rent – this amount is added to your disposable income.

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za

Properties under R1 Million, “To target Investors”

With the interest rate at the lowest in years, investors are now targeting buy-to-let properties. Many landlords are now looking at double-digit rental increases this year.

A strong recovery in investment buying is predicted for this year. Investors will be looking to buy properties priced below R1m, due to stronger returns being expected than cash in the bank. Property still remains the best value for money.

“FNB property strategist, John Loos, backs up these claims referring to the latest Stats SA figures, which show that residential rentals have steadily increased with an average growth of 5.6% recorded in November year-on-year. Sectional title flats have shown the largest increase, jumping by 8.6% while free standing houses recorded the lowest growth at 3, 56%.”

According to the TPN (Tenant Profile Networking) Credit Bureau the percentage of residential tenants paying their rent on time has risen to 81% in the 3^rd quarter of last year. The number of defaulting tenants has decreased to 10%.

This article has been reprinted with the kind permission of Masilo Freimond Inc.
Tel : 011 958 0488
Fax : 086 610 0276
E-mail : info@masiloincjhb.co.za