Friday, 7 September 2012

Interest rate and tips for your home loan!


“An interest rate cut should have some mildly positive impact on the property and home loans business.”

well that is true to some extent but you cannot just rely on this.

So some simple but sound tips for householders and the man in the street:

STAY WITHIN YOUR BUYING MEANS -  Although interest rates are at historical lows, home buyers should buy well within their means, in order to make provision for a significant degree of interest rate increase in future, these will come somewhere and somehow.

Watch the external costs - Costs related to housing such as municipal rates and tariffs are escalating at rates significantly higher than consumer price inflation.
While it is difficult to predict when these rapid increases will subside, given South Africa’s infrastructure funding needs, this makes it even more essential to borrow well-within one’s means, and ensure you read the meter and watch the leaks.

Peg your rate - Besides buying well within your own means so as to be able to absorb future interest rate hikes, because they will come, fixing interest rates is another way of being better prepared for this eventuality.  However your fixed rate will be quite a bit higher than prime.  So plan for this

Use it or ,lose it.

3 comments:

Best Buy to Let Mortgages said...

Now-a-days people more prefer home loan. This type of tips is very useful for purchase any real estate property.

nehvabby said...
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Chris from 123homeloans.co.za said...

It is certainly important that evaluate your job stability and financial status and how big of a mortgage loan you can really afford to pay back. Buying a property that's way out of your price range could wind you up in a bigger debt trap and put you at greater risk of losing your home in the event of default or foreclosure.