South Africa Flag logo

South African Skeptics

October 24, 2019, 03:27:34 AM
Welcome, Guest. Please login or register.
Did you miss your activation email?

Login with username, password and session length
Go to mobile page.
News: Follow saskeptics on twitter.
   
   Skeptic Forum Board Index   Help Forum Rules Search GoogleTagged Login Register Chat Blogroll  
Pages: 1 [2]  All   Go Down
  Print  
Author Topic:

Purchasing a house

 (Read 6521 times)
0 Members and 1 Guest are viewing this topic.
Faerie
Hero Member
*****

Skeptical ability: +10/-2
Offline Offline

Posts: 2113



« Reply #15 on: 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....  Embarrassed
Logged
Hermes
Hero Member
*****

Skeptical ability: +18/-2
Offline Offline

Posts: 1137



« Reply #16 on: 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.
Logged
steveweiss
Newbie
*

Skeptical ability: +1/-1
Offline Offline

Posts: 14



« Reply #17 on: 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.
Logged
themyst1971
Newbie
*

Skeptical ability: +0/-0
Offline Offline

Posts: 37


A geek, fanboy, dreamer and computer programmer.


themyst1971
WWW
« Reply #18 on: 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.
Logged
steveweiss
Newbie
*

Skeptical ability: +1/-1
Offline Offline

Posts: 14



« Reply #19 on: 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.
Logged
BoogieMonster
NP complete
Hero Member
*****

Skeptical ability: +19/-1
Offline Offline

Posts: 3097



« Reply #20 on: October 25, 2011, 09:45:13 AM »

Indeed BUT a property owner does not get yearly increases like a renter does. He pays a flat fee p/m for 20 years (in theory) plus or minus rate adjustments. The first 3 years or so is the real bitch. The trick is one must have enough income to surmount those 1st couple of years. And trust me as someone who bought a property in the last year, that first year is a b****. The transfer fees, lawer fees, rates, levies, utilities...  add up to a crapload really quick. As a single person, owning property is a very hard thing to do, and I don't see it getting easier in future. Sadly, I don't live in the time of my parents when these things were much more possible for middle-class families.
Logged
Faerie
Hero Member
*****

Skeptical ability: +10/-2
Offline Offline

Posts: 2113



« Reply #21 on: October 25, 2011, 10:55:34 AM »

Indeed BUT a property owner does not get yearly increases like a renter does. He pays a flat fee p/m for 20 years (in theory) plus or minus rate adjustments. The first 3 years or so is the real bitch. The trick is one must have enough income to surmount those 1st couple of years. And trust me as someone who bought a property in the last year, that first year is a b****. The transfer fees, lawer fees, rates, levies, utilities...  add up to a crapload really quick. As a single person, owning property is a very hard thing to do, and I don't see it getting easier in future. Sadly, I don't live in the time of my parents when these things were much more possible for middle-class families.
I agree with Boogie.  I bought my first house at age 23, and managed subsequently to upgrade every 7 - 8 years.  My last house I paid up within 7 years and I didnt intend to buy again until the S/O waltzed into my life and upset everything. Not that I mind.  It was a much more complicated process this time around, and far more expensive than any of my previous homes cost (I'm not referring to the actual purchase price here).  It is still, imo, a worthwhile investment, paying rent never did it for me, and the knowledge that "home" will remain so until I decide differently brings a sense of security to my life. Nobody can give me notice and I dont have to abide with anybody else's rules either. If you can afford any type of home at this point of time - regardless of how small - go for it, pay it off as fast as possible and upgrade.  The interest rates are the lowest its been for years, and you can fix it for two years which would give you some security initially.  If you're  a first time buyer, you'll most likely be considered for a 100% loan, and you'll only need to scrape together attorneys/transfer fees. Go have a look at the various bank's sites for "distressed" properties, some good bargains there.
Logged
steveweiss
Newbie
*

Skeptical ability: +1/-1
Offline Offline

Posts: 14



« Reply #22 on: October 25, 2011, 13:14:41 PM »

There are advantages to "homeownership" over time, but one is also exposed to fluctuating interest rates, increasing rates and taxes, changing neigbourhoods, maintenance costs, economic recessions and illiquidity.  Being a financial adviser with Discovery I think that one should also include the cost of bond cancellation cover in the event of death and disability as part of the cost picture.  Every individual is different and has different priorities, so one must weigh one set of values against others.  I personally prefer ownership (shared with the bank which lent me the money) but that is not a one size fits all prescription.  One's age, income, family responsibilities, health, job stability and other factors may result in one option being preferable to another.   
Logged
GCG
Hero Member
*****

Skeptical ability: +8/-4
Offline Offline

Posts: 1829


skeptical mantis is skeptical


adele horn
WWW
« Reply #23 on: October 25, 2011, 13:29:39 PM »

i would love to own a house.  what i can afford, is a matchbox.  matchboxes dont allow dogs, cats, rats, etc.  thus, rental it is for me.
Logged
BoogieMonster
NP complete
Hero Member
*****

Skeptical ability: +19/-1
Offline Offline

Posts: 3097



« Reply #24 on: October 25, 2011, 14:27:02 PM »

Almost forgot to mention, you get to keep a portion of the money. Yes as you point out, in an illiquid asset. But still. It helps to pay for your dwellings in the future too.
Logged
steveweiss
Newbie
*

Skeptical ability: +1/-1
Offline Offline

Posts: 14



« Reply #25 on: October 25, 2011, 16:05:08 PM »

Do you mean that you create equity in the property over time?  Yes, but one must not be misled.  One needs to do an accurate evaluation compared to renting an equivalent property including all of the expenses pertaining to homeownership and attribute a time value to those amounts and compare that total to having invested the difference at the same rate of return minus rental costs.  The tax issue is also a factor to include.  An unsalable property can be a burden in poor real estate markets or if one's tenants do not care for the property. 
Logged
Pages: 1 [2]  All   Go Up
  Print  


 
Jump to:  

Powered by SMF 1.1.11 | SMF © 2006-2009, Simple Machines LLC
Page created in 0.347 seconds with 24 sceptic queries.
Google visited last this page March 07, 2019, 21:59:59 PM
Privacy Policy