PROPERTY TALK
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For the Buyer
With the recent status change for the countries financial well-being to Junk Status; many people have
mixed feelings about what they should do next regarding property. There is a good and bad side to the
current financial situation; and it depends on how you approach it.
The Bad:
With the financial well-being of a concern for most South Africans there are expected challenges for
those looking to use Credit or borrowed money from banks.
Banks will be more reluctant to loan money to buyers look-
ing to buy the home of their dreams. Loan sizes will be
reduced in order to minimize the risk to the banks. This has
a domino effect to the Buyer; and although it might not be
your desire to qualify for a smaller bond, the idea is to pro-
tect you by not over-exposing you during these difficult
times. You will also note that the interest rates provided
will probably increase and trends have already shifted from
11.25% to 16%.
The Good:
With a little bit of planning (and saving) you can secure a
competitive loan rate that will be comparable to loans
granted prior to the Junk Status season. Putting aside a
portion allows for you to perform responsible lending and
this shifts the trend of the market in your favor. Currently
the national trend has shifted to a “Buyers Market” and
Port Elizabeth is adjusting to this trend. This adjustment
may be about 6 months away. In order to curb the trend,
you should consider saving a portion of 10% or more of
your expected bond as well as the costs for the Transfer
Fees. Having the 10% plus approach will allow for you to
negotiate a better interest rate on your bond.
Handy Tips
It is advisable to save for the cost of
the Transfer and Bond Registration
Fees separate to the finance required
for the actual purchase value of the
property.
For more advice on property options and
the due process of buying,
selling and investing…
Having a “10% Plus” approach of Marc van Heerden
saving that you can use toward a
deposit will possibly put you in a
better position to negotiate on your
bond interest rate. Cell: 073 198 9369
The market is shifting to a “Buyers
Tel: 041 360 0365
[email protected]
www.sothebysrealty.co.za
Each office is independently owned and
operated
Market” , so be prepared by getting a
pre-approval from the bank or mort-
gage originator and ensure you know
your numbers.
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