‘ As a property investor , you always want to use as little of your own funds as possible .’
ACCESS BONDS a larger portion of the bond payment is now allocated to capital instead of interest . As a property investor who is keenly aware of my monthly cash flow , I always opt for the first option , where the monthly bond payment is reduced .
As a property investor , you always want to use as little of your own funds as possible . That ’ s why I always try and obtain a 100 % loan from the bank when buying a property . I do this even if I can put a deposit down because I can always pay those available funds into my access bond after the bond has been registered . And it has the same effect as putting down a deposit beforehand . The only difference is that I have those funds available for future requirements or investments .
It is , however , crucial to note that an access bond does not grant you the capability to borrow the entire amount you have paid into the bond . Instead , you can only withdraw the amount that exceeds your regular monthly instalment . If you want to access the amount of the bond you have already paid off with your monthly instalments , you can apply for a readvance .
‘ As a property investor , you always want to use as little of your own funds as possible .’
A readvance is when the bank allows the borrower to access the capital that has already been repaid . This is done by utilising the existing mortgage bond .
Generally , several conditions are associated with this arrangement :
• The borrower must maintain
SA Real Estate Investor Magazine APRIL / MAY 2023 36