PROPERTY & INVESTMENT
But not so fast ! Your home loan could be what helps you with a myriad financial problems . Here ’ s why you should consider keeping it open :
1 . It ’ s an unofficial bank account
Of course , interest rates can ( and do ) change , so it ’ s always worthwhile shopping around every year to make sure you are still getting the best deal .
3 . It could help you buy another house
‘ Don ’ t close your bond account once your home loan is paid off . It ’ s a bank account like any other . If you keep it open , you could use it to access funds in the future . Also remember that any amounts you pay over and above your monthly instalments lie in an access facility and can be used at a later stage , as needed ,’ says Carl Coetzee , CEO of BetterBond .
2 . It ’ s a cheap form of credit
A home loan is the cheapest form of credit you can get now . ‘ The interest rates charged on home loans are usually lower than those on car finance , credit cards and personal loans . That ’ s reason enough to keep your home loan account open , even if your bond is paid up and you must pay a nominal monthly fee to keep it active ,’ says Coetzee .
If you ’ ve always dreamed of owning a holiday home or helping your children buy their first home , your original bond could help .
‘ There is no real benefit in cancelling your bond , unless you are selling the property , or you are absolutely sure that you will not be needing to access funds again . The bank will keep your account open unless instructed otherwise . Accessing your bond and paying “ cash ” for a second property can save you in bond registration costs ,’ points out Coetzee .
4 . It could help pay for unforeseen costs
As you get older – especially when you head towards retirement – you may not be as cash rich as you once were . Unforeseen costs ,
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