Save for a mortgage deposit
JOHANNESBURG – Homeowners receive savvy tips on how to save up for a deposit on their dream home.
Tony Clarke, managing directer of Rawson Property Group, recently provided some helpful tips to first-time home buyers who want to save for a mortgage bond deposit.
“While saving up a deposit may be difficult in these tough economic times, putting down a sizeable deposit can make all the difference to bond payments,” said Clarke.
“Having capital available for a deposit affects your home loan in several ways; firstly, it shows the bank you are financially responsible, which lowers your risk profile. Secondly, it reduces the size of the bond you’ll need, which also decreases risk from the bank’s perspective.”
According to Clark, having a deposit also offers a better chance of securing finance at a favourable interest rate if a person has a lower risk profile.
Clarke went on to give potential homeowners cost-saving tips they could use to save up for that deposit. “We all need to eat, but convenience foods in South Africa are expensive, so spending a little more time in the kitchen can save you some serious cash. Instead of ordering in or eating out, try cooking a few quick and simple meals at home.”
A second tip Clarke offered was to cut back on credit and this included using credit cards and store accounts, which, while making life easier, also allowed consumers to spend more than they should or can afford.
Clark concluded by stressing that while saving isn’t a quick process, many homeowners often implement such saving tips and this went a long way in fast-tracking bond payments.
“A lot of people choose to continue their frugal habits after buying their home and end up paying their bond off much faster than expected.”
More tips from Clarke included asking for an insurance re-evaluation on insured items to get a decreased premium; think twice before taking that cellphone upgrade; and cancel that wasted gym membership.
Read: Homeowners urged to consider all options on home loans
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