COVER STORY
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If the buyer is a first-time homeowner , then such homeowner can save thousands of Rands , if the proceeds of a FLISP policy are paid into the home loan account , reducing the capital as a ‘ once-off ’ payment .
Not many first-time homeowners are aware that they can apply retrospectively for a FLISP subsidy , where they have never apply for the subsidy previously .”
Total Payment over 20 years
For example , if a home loan of R605 480.00 is paid back over a 20-year term at the current prime lending rate of 10.5 %, the interest to be paid back will add an extra R845 317.00 to the total home loan repayment .
This will mean that the homeowner will end up paying back R1 450 79.00 to the bank over the 20-year repayment term , where the home loan interest rate of 10.5 %.
If the interest rate is 11.2 %, then an extra amount of R914 275 will be payable on the home loan , and the total payment would be R1 519 755.00 .
How a first time home owner can save thousands of rands
We recently assisted Tumelo , a new home owner who initially did not apply for a FLISP subsidy before taking transfer of his new home .
Tumelo took transfer of is new home in March 2022 .
The home loan registered was for the amount of R605 480.00 , which means that the total repayment , with capital and interest at the prime lending rate will be
38 FEB 2023 SA Real Estate Investor Magazine