Real Estate Investor Magazine South Africa October/ November 2019 | Page 31

“J
ust as home-owners will prepare their properties
for show days and viewings by cleaning, polishing
and painting, so potential home-buyers need make
sure that their finances are in good shape before they go
house-hunting or apply for a home loan,” says Carl Coetzee,
CEO of Betterbond.
“This is important because although the banks are
currently actively seeking to lend to home-buyers, they still
require borrowers to have clean credit records and sufficient
disposable income to be able to afford the loan repayments,”
adds Coetzee.
In addition, he notes, those who have saved up and are able
to pay a deposit may well be able to qualify for an interest rate
concession, especially if they apply for their loan through a
reputable originator like BetterBond.
“And this could save them many thousands of Rands on
the total cost of their home over the lifetime of the loan.For
example, an interest rate reduction of just 0,5% on a 20-year
bond of R1,5 million translates into a potential saving of more
than R120 000 in interest, as well as a total of about R6000 a
year off the monthly bond instalments.”
Those who are planning a home
purchase should begin by
decluttering and cleaning up their
finances as follows:
1
Dust off your budget.
By this time of year, many consumers are no longer
sticking to the budget that they drew up in January.
But if you’re serious about reaching your financial
goals – including a home of your own – you need to know
exactly where your money is going every month, where you
can save and how long it will take to pay off your debts.
2
Shoo away the budget “vampires”.
Review all the subscriptions and services that you pay
for every month via debit order and that could be
draining money from your budget without you even
really noticing.
Charges for these services tend to creep up during the year
and the combined total of those increases can be quite
substantial, so it’s always worth taking a second look at what
you are actually paying for things like your gym membership,
cellphone contract, streaming services, garden maintenance
and storage space.
3
Brush up on your loyalty cards and
rewards programmes.
It’s a great feeling to earn points or Rands for your
purchases, but you need to gather them strategically.
For example, if there’s a monthly charge to belong to a rewards
programme that is more than you would earn from the
programme, ditch it.
With store cards, make sure you don’t fall into the trap of
spending just to earn points, and stick to a few where the
points don’t expire quickly and you can accumulate a stack for
something special – like your birthday, or Christmas spending,
or a single expensive item you’ve had your eye on.
4
Toss out bad spending habits.
Most of us can’t do much about the cost of things we
have to pay for, like food, petrol, electricity, school
fees and the roof over our heads. But we can change
our routines to avoid a substantial amount of what is called
discretionary spending – like the cost of drinks with friends
every Thursday night, or lunch out with the family every
Sunday. Plan alternatives and make compromises and use
what you save to pay off debt – you’ll thank yourself later.
5
Steam clean your credit record.
Everyone is entitled to a free credit report from a
credit bureau once a year. Even if you think your
finances are in good shape, now’s a good time to
check your report and make sure there are no nasty surprises,
like old accounts you forgot to close or someone else taking
out credit in your name.
To improve your credit score, you should also make sure that
you make all your account and card payments on time every
month. And if you do have a bad debt or judgment on your
record, you need to address it and remove the “stain” before
you apply for a home loan.
6
Scrub away your debts.
It’s all too easy to think that you don’t owe that much
when you have borrowed from several different
credit providers. But when you add up everything
outstanding on your car, your furniture, your credit card and
your store accounts, not to mention any personal or student
loans, the total can come as quite a shock. If you want to be
debt free, it’s important to be realistic and then to make a
proper plan to pay everything off - and avoid too much credit
in the future.
7
Start looking for ways to earn extra
cash.
Clear out your cupboards or storage unit and hold
a garage sale. Get creative and sell things you make
online. Create a “side hustle” by using your knowledge, skills
and spare time to do something people will pay for.
Work part-time in the evenings or on weekends. Put any
additional money you can make into paying off your debt, and
then starting to save for the deposit on your home.
Issued by BetterBond
For more information please contact
Carl Coetzee on 011-516-5500
Or visit www.betterbond.co.za
SOURCE Betterbond
SA Real Estate Investor Magazine OCTOBER/NOVEMBER 2019
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