How to pay off your bond quicker
Category 3%.Com Properties
Many of us are most likely going to buy a property with a loan from the bank (bond) and there is sadly no escape when it comes to paying it off, but there are ways to pay off your bond quicker.
By using a bond calculator, you can estimate the monthly repayments with the current interest rate. This tool is important to use because when purchasing a home with a bond, it is going to be a large debt and you need to ensure you can afford it. Also take into account that interest rates can increase which would result in a higher monthly instalment.
Below are some tips to consider, to pay off your bond quicker:
1. Secure the best interest rate
Bond originators will assist you in obtaining the best interest rate on your bond by submitting your application to various banks. By negotiating and accepting the best interest rate, it will make a big difference on your monthly repayments. Keep in mind that you will pay off your bond over 20 years, you only have the opportunity once to negotiate the best possible interest rate, and that is at the onset of the loan (bond).
2. Deposit
By saving up and putting down a deposit when you purchase your home, you will automatically have a lower monthly instalment. This will also help you negotiate a lower interest rate with the banks as there is less of a risk for the bank.
3. Extra cash
If you have a spare room or a cottage on your property, consider renting it out as that cash can be put towards your bond. Another way of finding extra cash is by selling old or unwanted furniture or even appliances.
4. Raises and bonuses
This may require discipline because whenever we receive a raise or a bonus, we like to spoil ourselves. It is only human for wanting to do that! However, it may be a useful way to pay off your bond faster. Your future self will thank you!
If you receive a 13th cheque, consider paying at least a portion towards your bond. If you receive a raise, it may also be a good idea to pay that extra bit into your bond on top of the normal monthly repayment.
5. Tax Returns
When submitting your annual tax return to SARS, many individuals often receive a lump sum back from SARS. Paying this towards your bond, is another helpful method to pay off your bond quicker. This will require self-control.
Conclusion
Taking out a bond to finance your purchased property is a huge responsibility. Paying it off quicker will put you in a better financial position. At 3%. Com Properties, we are passionate about placing our clients in a better financial position. We charge only 3% sales commission when selling your property. We provide an innovative property selling solution for our client's largest life investment that is both affordable and seamless.
Contact our experts if you need assistance or visit our website to view more.
Author: 3%.Com Properties