Buying a home is a dream for South Africans, young and old. However, with the current economic scenario, the first priority is to lower costs in whichever way possible. Negotiating with your bank for a lower interest rate – even one percentage point less than your current rate can save you thousands of Rands in the long run.
Don’t be stuck with a bond interest rate above prime – Gumtree gives you tips to negotiate with your bank effectively:
- Even in a buyer’s market where banks are offering 100% loans, we recommend putting in a deposit that proves you have sound financial habits. This gives you the upper hand during negotiations for a better interest rate with your bank.
- During months where you have some cash to spare, resist the temptation to spend it. Instead, direct this money into the bond repayments, which in turn, decreases the lending term.
- In some cases, you could submit a formal request to the bank to re-evaluate the interest rate. However, you must reiterate how regular you have been with your payments and are, therefore, a low-risk client.
- If the bank has rejected your request to re-evaluate the interest rate, you could approach other banks and financial institutions as a leverage to negotiate.
Once you have found the best fit for you, it is time to apply for the bond. The following are the documents needed for your bond application:
- A copy of your ID document
- A copy of the offer to purchase
- Proof of income i.e., salary slip not more than two years old
- Bank statements for the last 6 months