Home Loan Options

As a first time home buyer and with the many home loan options in South Africa, choosing the right home loan can be quite an intimidating and confusing process.

The question is which is best home loan option available? Banks, for instance, usually provide home loan for between 10 to 30 years. The repayment is usually monthly at an interest rate set by your bank depending on your profile, and is usually lower than prime (which is currently 11.5%).

Buying a property is a big decision and a long-term investment. Because there is a wide range home loan products offered by the respective banks, you need to do a little 'homework' or research to find the one that best suits your needs.

Banks nowadays are not as strict as they used to be, and tend now to look at all applications based on individual merit. The general rule of thumb is that you should be under the age of 80 by your final repayment date.

They are also a lot more flexible then they used to be and can adjust your monthly repayments order for you to pay off your home loan faster.

Banks may also require life cover before approving your home loan. However you do not have to purchase your life cover through your bank, but you will probably need to show the bank proof that you have life cover.

There are additional costs involved in the purchase of a property such as transfer costs etc. Due to this, banks will usually offer a 108% bond for first time buyers to help them cover these costs.

The various South African banks offer different benefits with regards to home loans. For example, as part of its client reward program First National Bank offers its clients eBucks on all home loan products. FNB also offers clients its One Account product, which consolidates all accounts into one.

Nedbank offers a "Buy to Let" product. The purpose of this is that the rental income is considered when your repayments to income is calculated. This will enable you to borrow more so that you can invest in additional property.

So to sum up: There are many home loans options available in South Africa via our various banks, each with unique features and benefits. It is always worth taking the time to investigate the options available to you so that you proceed with peace of mind that you have made the best choice.

Related Insurance Articles:
* Do Your Homework Before Buying a Home
* Using a Home Loan Originator
* Home Loans Basics
* Home Loan Transfer Duties
* Should You Keep Your Bond Open
* Home Loan Interest Rates
* How To Use Your Bond As A Financial Resource
* First Time Home Buyers Missing Out On Best Bond Deals

3/7/2008 4:04:31 PM