Ian Wason, the CEO of DebtBusters, South Africa’s largest debt counsellor, warns on troubled times ahead for home loan providers “The increase of just 0.5% will have a massive impact on consumers with home loans. Not only are these consumers already faced with price hikes in electricity, rates and petrol, but many of them are overloaded with unsecured debt as well. This may be the final straw for many of them, and I would expect to see a large spike in defaults on the banks home loan books in the month ahead.”
28 November 2012
If you have savings, an outstanding amount on your bond and are considering changing your car you may want to note the following points.
If your car is in good condition it would be a waste of money to buy a new one. A new car depreciates on average by 20% as you drive it out of the show room, so you are throwing money away instantly.
Selling your car just because the maintenance plan has run out is a common occurrence. Most cars will run very well for several years afterwards (as long the car is serviced regularly) and the maintenance costs are not as high as the interest payments and devaluation on a new car.
If you are considering selling your home then putting extra money to lower your bond means you will have a bigger deposit to put down on your new home. Always negotiate with the estate agent, as paying 7% + vat for selling your home is a lot of money and not the international norm.
Ensure you stick to a price range when purchasing a new home to make sure that the end of the loan sees you debt free by the age of 50-55. This gives you financial freedom for a time when you may want to make some serious life changes.
For further advice please contact DebtBusters on 0869 99 06 06 or have a look at our website www.debtbusters.co.za.