Purchasing a house

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Faerie (June 13, 2011, 14:10:13 PM):
Damn, but I have a lot going on in my life right now.

All the drama is now done, attorneys paid, waiting for notification that its being lodged and 10 days after that it should be registered and dusted and ready for us to move in.

which brings me (foolishly at this point of time), to have a good little look at my monthly budget.....

Gark!!!!!

we're going to be piss-poor for the next year at least until the car's been paid off.... :-[
Hermes (June 13, 2011, 15:43:21 PM):
...and then we get yet ANOTHER phone call - we both need life insurance, and no, the current insurance we have already is inadequate.... (wtf!!)
Faerie, I vaguely recall that life assurance as a precondition for a home loan is illegal, but I could not find anything on this topic on the internet and cannot vouch for it. The bank certainly cannot force you to use their choice of assurance company.
steveweiss (October 23, 2011, 09:17:05 AM):
If a person has life cover equal to or greater than the loan amount one can cede this cover to offset the loan balance without taking out new cover. Many banks no longer require life cover in any case, but it is in the best interests of the borrower to have the protection of one's major asset in the event of death or disability rather than have the property repossessed. Most South African are underinsured, and a reputable assurance will underwrite the risk prior to claim, so medicals will usually be the the case, and always an HIV test. The question is how does the need for debt cancellation cover integrate with one's overall portfolio since cover for a home loan isn't the sole purpose of having cover in most cases. It sounds like you need the advice of a financial planner rather than a bank employee or inexperienced representative.
themyst1971 (October 25, 2011, 06:27:11 AM):
As a single male earning a good salary, no matter what I do, I don't earn enough on my own to even start asking for a loan.
steveweiss (October 25, 2011, 07:36:05 AM):
There are options. 1. pay rent and invest the difference between what a bond payment would be versus the rental expense. Then you have a cash fund and liquidity that you wouldn't have with a home loan. 2. purchase a property in a partnership or with the assistance of parents. On the other hand, renting avoids paying rates and taxes and maintenance costs as well as attorney's fees, transfer costs, and estate agent's commissions. One also can change location rather more easily than in owning a property. So, property ownership is not all one-sided. Those who haved purchased properties over the last 3-4 years have been net losers from an investment point of view. In addition, bond payments can increase rapidly and by large amounts when inflation is an issue or the currency is under pressure, but one would be limited in one's exposure to increases under a lease agreement. Many people have lost their properties when they haven't been able to keep up with bond payments, but renters have largely escaped from that crash.

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