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RENEGOTIATE YOUR BOND INTEREST RATE
Your homeloan is the single biggest financial instrument you will ever commit to. You need to get the interest down; however you have already committed to a rate. You do not have to be loyal to any bank.
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Your homeloan is the single biggest financial instrument you will ever commit to. You need to get the interest down; however you have already committed to a rate. You do not have to be loyal to any bank.
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You need to have ONE of the below to renegotiate:
1. An excellent credit score
2. You increased your disposable income from the time you took out the loan to now
3. You have repaid your loan diligently with the same bank for a number of years, preferably 5 years
1. An excellent credit score
2. You increased your disposable income from the time you took out the loan to now
3. You have repaid your loan diligently with the same bank for a number of years, preferably 5 years
Where to start. You need to go to all the banks (online). Donât leave any out because you think you wonât qualify. The worst thing they can say is no. We have thick skin.
I approached all the bank myself. I am not sure if bond originators do switches. Will need to find out.
I approached all the bank myself. I am not sure if bond originators do switches. Will need to find out.
CostsâŠThere are 2 costs in switching a homeloan, penalty interest and bond registration fees
PENALTY INTEREST with your current bank. If you do not give 3 months notice, you need to pay 3 months worth of interest. You can give notice at any time. You donât have to follow through with the notice, but DO NOT pay the penalty interest EVER
BOND REGISTRATION FEES. This is the attorneys fees to process the legal documents. Remember your house belongs to a certain bank per the legal documents until you made that last payment. To change the name from one bank to another needs attorneys.
BOND REGISTRATION FEES. This fee can be negotiated with the bank. I got my bank to waive this fee 100%, so it is possible to pay R0. Mine was supposed to be R30k
As much as I want to preach the interest rate is important, nothing beats saving on interest like repaying the loan off faster. I did some basic calculations based on a R1,5m property. Look at a 20 year bond vs a 15 year bond. You can take out a 20yr loan, but repay it in less
Final note...I am not going to discuss the banks one by one. But the bank that will give you the best rate is ten to one the one that receives your salary monthly. Use that as leverage.
That's the soul story for today. Be good!!!
That's the soul story for today. Be good!!!
