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Ask your parents for help when buying – you will be surprised



Not everyone has a huge income or savings to help them buy their first home.

Most people are able to take a substantial bond loan to buy a property but often battle to pay transfer and bond costs that can be up to eight percent for a more expensive home.

But where can this extra money be found?

There are various ways to get the money that you need.

Firstly, if you do not want to ask for outside help you can look for a personal loan.

Buying a R1 million home, you will require cash to pay for bond and transfer costs of about R50 000. 

At this level there is no transfer duty which would amount to an additional eight percent on a R2 million house or higher.

Even R50 000 is quite a substantial amount to find in order to put your new home into your name.

Sometimes you can get the bank to grant you a five percent higher bond than the purchase price and use the extra amount to get the home in your name.

In this case the bond and transfer costs would be included in your bond and paid off over 20 years.

Alternatively, you could take a private loan for the same amount of R50 000.

Here, the interest rate will definitely be higher than 15 percent instead of eight percent and the loan will have to be paid off over a short period of 36 to 60 months.

It would mean that you need to pay off your bond payment and your loan payment.

This can be quite expensive but worthwhile if this is the only way you can buy your dream home.

Just make sure that you can afford it.

Over five years, this would mean an additional R1 200 per month on top of your bond of R8 400.

At the end of year-five you will drop down to your normal bond payment.

The quicker you can pay this extra loan the better.

Remember every bit extra that you pay comes off your balance and the quicker you pay it off, the cheaper the loan becomes.

Borrow from friends and relatives – not always something that you would like to do but a necessity.

It can actually be quite a good investment for them if you pay on time.

You would need to agree to an interest rate but even eight percent would be more than they are currently able to get in any bank.

Just make sure that they do it legally as there are some rather silly laws about lending money to people – check with an attorney.

A more secure way would be to arrange with your bank that your friend or relative invests into your bank and on the strength of that five-year investment, the bank lends the money to you.

They will handle all the legal aspects.

This means that they have your friend’s or family’s money as security against your loan.

The most popular is to borrow money from your parents or parents-in-law.

Quite often parents expect their children to ask them to help them buy their first home.

Parents often put money aside to help but are shy to offer.

They are afraid to embarrass their children.

Sometimes parents have the entire price to buy the home and are happy to donate the money or at least the deposit or bond and transfer costs.

I however suggest that you speak to your attorney to avoid donations tax.

Parents often have money that they can lend their children to buy their first home rather than investing it in a bank.

They just need to get a similar return to what they would have gotten at the bank. 

Every effort should be made to pay the money back on time, though from my experience it often happens that parents donate the money back to their children at the end of the day.

Yes, there are various ways to get the money that you need.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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Gas it out, give Eskom the boot



ALTERNATIVE SOLUTION . . . Gas can be used for heating water, ovens and stoves in general

Electricity has simply become unaffordable. And, as if that’s not enough, it’s not always available.

In recent months, the power utility has been churning out media statements explaining the loss of generation at various power stations and pleading with consumers to use electricity sparingly.

While the updates are important, consumers naturally expect electricity to be available whenever they turn on the switch.

The recent tariff hike of over seven percent in Mangaung Metro has proved quite steep to most households and it might not be far-fetched to expect another round of hikes in the coming months.

I strongly believe it’s now time to seriously consider other practical solutions to end this double inconvenience of high prices and inavailabilty of electricity.

Alternatives like solar and gas could ease the problem quite significantly but it comes at a cost.

In fact, the installation costs might be quite discouraging, but once the systems are in place, there are no major expenses to be incurred – this including solar electricity, solar water heaters and gas.

Electrical geysers chew electricity while solar heaters are effective and efficient.

Natural gas is also a realistic alternative.

The system is cheaper to install by far and gas cylinders normally last for months.

Gas can be used for heating water, ovens and stoves in general.

Larger systems can also have central heating.

Gas is readily available and suppliers have delivery services for 10kg cylinders and above.

And unlike electricity, gas geysers only heat water on demand, which means that you don’t sit around with pre-heated water in your geyser.

It only heats on demand.

And when cooking, pans heat up quickly and, importantly, cool down when the gas is switched off.

It is a different type of heat and is great for making oven bread.

Worth a try!

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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Langenhoven Park chain store robbed



SHOP ROBBERY . . . The Walk Centre in Langenhoven Park

Bainsvlei police in Bloemfontein have launched a manhunt for suspects involved in business robbery at a chain store at The Walk Centre in Langenhoven Park on Wednesday.

The complainant, who is the manager of the shop, told the police that two men walked into the shop pretending to be customers before robbing the shop.

“Suddenly they pulled out firearms and accosted the four cashiers and instructed them to walk back into the complainant’s office,” police spokesperson Lieutenant Colonel Thabo Covane said in a statement.

“The suspects robbed the shop of different brands of cellular telephones as well as an undisclosed amount of money, and fled the scene in a white Renault Clio with registration number HRT 558 FS,” he added.

Police were called to the scene and they are now investigating a case of business robbery.

Covane said anyone who might have information that could lead to the arrest of the suspects may contact Captain Thapelo Motseki on 082 466 8405 or call the SAPS Crime Stop number: 08600 10111. Alternatively, information can be sent via MySAPS App. – Staff Reporter

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Duets are sectional title too



A duet unit is by definition a two-unit sectional title scheme. Or at least is supposed to be.

However, I have seen these mini schemes with up to five units. Not sure how they get away with it.

Either way they are still mini sectional title schemes and have to be treated like their big brothers – but they aren’t.

Usually, each owner has their own rates account, own water and electricity account and just does their own thing. But that is where the complications come in.

Some owners have a bond and thus insurance. Some bought cash and forgot.

A body corporate is supposed to have a body corporate policy on all the buildings.

Let’s say that there is a fire in an insured unit but it also results in the building down of an uninsured unit.

And because this is a body corporate and all parties are trustees that are expected to have a body corporate policy, they will be equally negligent.

That means that the owner will have to pay 50 percent — or whatever the Participation Quota (PQ) ratio is — of the uninsured unit owner’s loss.

Would you like to be in that position? I don’t think so.

The same applies to maintenance.

So, if your neighbour thinks that his roof needs to be replaced, you will be liable for that same PQ part of the replacement cost.

The trouble is that nothing will happen while everyone is happy and things are running smoothly, but when there is a major problem, people look for solutions to their financial crisis.

It’s not worth it.

Run your mini scheme properly and contact Community Schemes Ombud Service if your neighbour won’t.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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