Blog

Find Out How Much Finance You Could Get To Buy Property

24 November 2020

Purchasing a house means that you’ll be making monthly payments to pay off your bond. Knowing if you’ll be able to afford those monthly payments is crucial; it will determine whether you’ll be able to go ahead with your decision to buy a property or not.

An Affordability Calculator lets you know what your monthly repayments are likely to be. It also indicates the total amount of interest you will be paying and the total repayment amount too. The latter will motivate you to work towards paying off your bond as quickly as possible! 

This is the information that you will need to put into the Affordability Calculator - if you plan to buy a property with someone else, you should combine your figures:

1. Your monthly gross income
   This is your income BEFORE taxes. 
   
   
2. Your monthly nett income
   This is your income AFTER taxes. 
   
   
3. Your monthly expenses
   This is the monthly amount you pay on debt and household expenses. DO NOT include rent and loan amounts if these will be replaced by the new bond payment.
   
   
4. The interest rate
   Most online affordability calculators use the current interest rate. But the interest rate that you are granted by the bank for your mortgage (home loan) may vary, depending on factors like your credit score and the size of the deposit that you have  available. By using a bond originator like BetterBond, you can secure the lower rate than you might get if you approached your own bank directly. A slight difference will save you a lot of money in the long run!
   
   
5. The repayment term
   This refers to the amount of time you choose to pay off the bond (property loan) to the bank. Finishing bond repayments sooner means that even though the monthly repayments might be more expensive, you will pay less in the long run. If you choose to pay your bond over a longer period of time, the monthly payments might be less but more interest will accumulate over the years and you will end up paying more for your property. 

But there may be more to what YOU can afford.

You may qualify for government assistance, which means you should look beyond an Affordability Calculator. FLISP (Finance Linked Individual Subsidy) provides lower and medium income earners with a substantial subsidy, that can be used to purchase property. Subject to pre-approval of a home loan, FLISP subsidies can be applied for, by any South African family whose household income falls within a specified bracket.

Down the line, if you are looking for some relief, here are 6 Ways To Make Your Bond Work For You.

For more information on Just Property please visit www.just.property or call (087) 550 2258.

Follow Just Property on Facebook and Twitter