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March 26 2010

Interest Rate – Good News

March 26th, 2010 Editor
Posted by Editor Under News No Comments » |
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Governor Gill Marcus presented everyone paying either a mortgage loan or car loan with some great news yesterday , the MPC has cut the repo rate by 50 basis points (0.5%) reducing the rate to 6.5%.  The move was generally unexpected and took the market by surprise , but most South Africans with debt certainy aren’t complaining.

XE.com – TEXT-South African central bank statement on rates

PRETORIA, March 25 (Reuters) – South Africa’s central bank cut its repo rate by 50 basis points to 6.5 percent on Thursday. Below are extracts from the bank’s statement, posted on its website. INTRODUCTION … The MPC has therefore decided to reduce the repurchase rate by 50 basis points to 6.5 percent per annum with effect from 26 March 2010. The MPC will continue to assess developments, and will adjust the monetary policy stance when necessary in order to achieve the …

Bush Radio 89.5 fm Newsroom: Rate cut generally welcomed

The Federation of Unions of South Africa says they are pleased with the Reserve Bank Monetary Policy Committee’s announcement today that the repo rate would be cut by 50 basis points or zero-point-five-percent. … George says the MPC is providing much needed room for monetary stimulus. George added that the economy is struggling with low consumer spending, high unemployment figures and lower personal income tax while the nation currently has a budget deficit. …

Repo Rate Cut « RealPro – Estate Agency

Johannesburg – The South African Reserve Bank’s (Sarb’s) monetary policy committee (MPC) has cut the key points on Thursday, bringing it down to 6.5%, with the prime lending rate dropping to 10%. The repo rate is the rate at which the central … Economists were unsure whether favourable inflation data would sway the MPC to lower rates. Statistics SA said on Wednesday consumer price inflation measured 5.7% year-on-year in February, below Sarb’s upper target range of 6%. …

South Africa: dovish SARB delivers surprise rate cut | Forex Info …

The South African central bank (SARB) announced that the Monetary Policy Committee (MPC) has decided to cut its key policy rate by 50bp, bringing it down to 6.50%. Details The key policy rate was cut by 50bp to 6.50% at the MPC meeting …

South Africa: Central Bank Cuts Interest Rates | Get Some News …

The Reserve Bank’s Monetary Policy Committee (MPC) has cut the repo rate by 50 basis points to 6.5 percent to the delight of many South Africans. Read more here: South Africa: Central Bank Cuts Interest Rates …

Here is an extract from former Governor Tito Mboweni urging the MPC to hold it steady as its not the time to cut in his opinion , fortunately for home and car owners the MPC decided to ignore his advice;

South Africa: Hold It Steady – It is Not the Moment for MPC to …

… thing as an easy interest rate decision, that every time the Bank’s monetary policy committee (MPC) met, it had to make a tough call. See original here: South Africa: Hold It Steady – It is Not the Moment for MPC to Risk a Rate Cut.

The news is certainly welcomed by everyone paying off a mortgage or car loan as well as many in the business sector who feel that an easier monetary stance will help stimulate the economy. The decision to cute rates can be attributed to the revised mandate that the Reserve Bank was given during Finance Minister Gordhan’s budget speech. Organise labour was instrumental in bringing about this policy shift.

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March 17 2010

New Car Sales in 2010

March 17th, 2010 Editor
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Everyone is holding thumbs that lower interest rates and optimism surrounding 2010 will help boost the local motor industry during 2010;

SOUTH AFRICA: NEW CAR SALES UP 20% IN JANUARY… physique NAAMSA uncover which a automobile marketplace grew by 15.5% year-on-year in January, yet a organization warned which Jan final year was unusually weak. See strange here: SOUTH AFRICA: New automobile sales up 20% in January.

Car sales are up, 2010 is off to a great start! | Common DialogueThe motor industry is the most volatile manufacturing industry in South Africa, measured over any significant time period. Hence this extreme gyration in sales is not totally unexpected. In both 2004 and 2005 sales of passenger car …

NAAMSA January 2010 FiguresThe market in January, however, has come in substantially above expectations reflecting a larger than normal carry-over of new car sales into the new year,” commented Mike Glendinning, Director of Sales and Marketing, VW of SA. …

Justmoney News » Blog Archive » New vehicle sales rising in SA South Africa continues to emerge from the economic recession stronger than ever after newly released data showed that new vehicle sales in the country went up by 20.5 percent in February.It was the second consecutive month of … Whether you’ll be buying your first vehicle brand new and in cash or whether you’re considering vehicle finance for a new or used car, there are a few things to keep in mind before going ahead with the purchase: Read the rest here… Share This! …

Vehicle sales continue growth path; Toyota holds steady,/a>The National Association  of Automobile Manufacturers of South Africa (Naamsa) on Tuesday reported that new passenger car sales in February grew by 27,5% compared with the 20 403 new cars sold during the same month last year, when sales …

New car sales driving higher Aggregate industry new car sales during February, 2010 had exceeded expectations and at 26009 units reflected a massive improvement of 5606 units or 27.5% compared to the 20 403 new cars sold during February, 2009 when sales had been …

Lower interest rates and and an upturn in the local economy should see an increase in applications for car finance , the industry has been struggling over the last few years and this is reflected in the low levels of credit extension in the vehicle finance sector.

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March 16 2010

Interest Rate Outlook 2010

March 16th, 2010 Editor
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We survey the blogosphere to see what others are predicting for interest rates during 2010 ;

Lower Interest Rates Will Revitalise Property Market By 2010
In 2009, the direction of the property market is largely defined by what is happening globally as well as politically in South Africa.With the introduction of the National  Credit Act as well as high interest rates, loans became …

South Africa keeps interest rates on hold at 7% – MarketWatch/FRANKFURT (MarketWatch) South Africa’s central bank decided on Tuesday to leave its repurchase rate unchanged at 7.0%. The decision was in line with market expectations.

South African inflation targeting to stay – Nene.
Opponents of the policy argue that efforts to contain inflation within the 3 to 6 percent target range have kept interest rates too high, adding to job losses during last year’s recession. The central bank raised interest rate by 500 …

South African Business – Standard Bank sees interest rates rising.
Posted by business on Thursday, March 4th 2010. Is it time to be cautious with debt or will it still be affordable? Read More on Moneyweb · Report This Post. Categorized in Uncategorized …

Sentiment appears somewhat mixed , but all experts agree that lower interests should play an important role in stimulating housing demand , resulting in a more robust property sector during 2010. We are also starting to see a slow uptick in new car sales – most agree that the economy has bottomed out.

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March 15 2010

Your First Mortgage Loan

March 15th, 2010 Editor
Posted by Editor Under Home Loans No Comments » |

Buying your first home can be both thrilling and scary and getting your first mortgage loan  is usually part of the process. Obtaining a mortgage loan can be confusing and stressful for many people, especially if this is a new experience. Without a doubt your home, even if it’s a starter home, is and will be, one of the biggest investments  of your life. With that in mind it is important to take the mortgage process slowly and not rush or skip important steps.

One of the very first steps necessary in the mortgage process is to decide if you want to deal directly with a bank  or to make use of the services of a mortgage originator. A Mortgage originator  is supposed to find the mortgage loan that is most suitable to the needs of the borrower and also take care of the many administrative and form filling tasks involved in the mortgage loan application process. That is what you are paying them to do , mortgage originators earn a commission from the bank, however you as the client always end up paying. Be wary of mortgage originators who charge a fee in addition to their commission , this practice is unethical.

First time home buyers typically used to be able to qualify for a mortgage loan of  107% of the purchase price – this assists in covering the costs of registration and transfer.Since the credit crisis most South African banks imposed stricter lending criteria and required buyers to be able to provide a deposit. Recently banks have started relaxing their lending criteria and in certain cases are providing 100% mortgage loans.

It is also important that you assess your financial situation to determine the affordability of the transaction. You can the free mortgage calculators available on this website to help you calculate out what your monthly payments might look like. It is important to conduct a what-if analysis taking into account interest rate movement to see what the situation will be should rates move up. You should also ask a lot of questions about anything that you may not fully understand. And research as much as using websites like loanfinder to assist you in making informed choices.

You must also find out about any fees that may be charged to you. Some fees, quite frankly, can be avoided by the educated shopper so shop around. Buying a home is similar to buying anything else, only on a much larger scale. You always want to get the best deal possible and remember to never, ever sign anything that you don’t fully understand.

It is also important that you fully understand your rights in terms of the new National Credit Act .

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March 3 2010

How To Finance Your Home?

March 3rd, 2010 Editor
Posted by Editor Under Home Loans No Comments » |
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You have found your dream home and everything seems perfect, now comes the crunch, How to come up with the cash for your new home? Buying a home is the biggest investment most of us will make during our lives, how to pay for this investment therefore requires some thought.

Depending on your financial situation you will finance your home in one of the following ways,

  • Buy Cash
  • Use a Government subsidy
  • Use employer subsidy
  • Finance with a mortgage loan/bond
  • A combination of the above

Buying Your Home Cash

If you are financially independent and wealthy you can purchase your new home cash, unfortunately most of us are not in Bill Gates or Warren Buffet’s league, so please continue reading.

Using A Government Subsidy

The Government provides a grant to qualifying persons to assist them in financing a home. To qualify for a government subsidy you must meet the following requirements:

  • Be a South African Citizen or enjoy permanent resident status
  • Married or living with a partner, if you are single you need to prove that you have financial dependants
  • Be over the age of 21 and competent to contract
  • Monthly household income of less than R3 500 per month
  • Be a first time property buyer

For more details on the Government’s housing subsidy please visit the Department of Housing Website – Click Here.

Employer Subsidy

Many companies still offer a housing subsidy to staff members, although not as prevalent these days many large organisations especially Government departments and parastatal provide this benefit. Speak to your Human Resources department to find out whether your employer offers a housing subsidy.

Mortgage Loans/Bonds

Most homes in South Africa are financed through mortgage loans/bonds provide by the major banks and other mortgage lending institutions in South Africa. A mortgage loan is a loan provide by a bank/mortgage lender and secured by fixed property. To apply for a mortgage loan you need to qualify in terms of the banks credit criteria and be able to afford the monthly repayments.

Purchasing a home is a big commitment and often a buyer might make use of a combination of these options , i.e.) cash and mortgage or mortgage and employer subsidy. If you are unable to afford or qualify for a mortgage loan at present you should read How to Qualify for A Mortgage Loan.

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