Making good money decisions when applying for your home loan

Cash-strapped South Africans, reeling from a series of economic blows like power and water outages, job insecurity, inflation, dire economic performance and no growth, are finding it harder than ever to secure their financial well-being and that of their families. But by making the right money decisions now, it’s possible to achieve more of your future visions.
 
Typically, home buyers take out a loan that covers the shortfall between their cash deposit and the purchase price exactly, and then begin paying it off. But as any homeowner would know, the expenses don’t stop there. Any home will need a certain amount of maintenance later, for example, a new coat of paint, fixing of gutters or roof repairs.
 
And it doesn’t end there. Once you’ve lived in a house for much longer, an obvious improvement usually suggests itself: a better layout of the kitchen, a bay window in one of the bedrooms or new tiles in the bathroom. Also, as your family grows, you may need a proper place to do homework or a playroom for energetic teenagers.
 
The long and the short of it is that maintaining and improving your property investment is ongoing. Having a plan in place to finance these needs at a later stage in your life is recommended.
 
For most of us, we would likely need to take out an additional loan on the house to finance repairs and improvements.
 
One of the best ways of planning your lifestyle proactively is to be smart when securing what will be one of your biggest investments: your home.
 
We know that registering a home loan is already expensive. What we often don’t realise is that deciding at a later stage to take out a further loan on our bond will incur another round of registration fees. For example, when you take out an additional R300 000 loan on an original bond of R1 million, this will incur fees of around R11 400.
 
There is a smarter way. In line with our philosophy of finding ways to create value ‘out of nothing’, and helping South Africans to make better money choices, we offer HomeVision with your home loan application. It’s a simple but powerful concept. Take out a bigger-than-needed bond when you purchase a house and keep the extra money in reserve for financing future home needs. The bonus is that you won’t pay for the extra money until you use it. 
 
Here’s how it works. When you take out a home loan with Nedbank, specify that you want to take advantage of HomeVision. You will be able to register the bond for up to 30% more than the property price, up to a maximum of R7,5 million. At this point, you will use only the money you need to complete your purchase, and your repayments will show only the amount you have used. The remaining loan amount will be registered at the deeds office and you can use this money later without additional attorney fees or applying for a second bond. 
 
You’ll save yourself the amount it would have cost to register a second bond and any other costs that would have come with another loan. It will also save you time, as the bank would simply have to do an affordability check and property valuation to loan you some or all the extra money already registered with HomeVision at the start of your home loan.
 
Making good money decisions like this one can help save you money and time for those future home needs.
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