5 Ways To Hack A Home Loan

Own it, bond free, in 13 years instead
of 20

For those of us who aren't trust fund babies, a home loan is pretty much unavoidable if you want to buy a house.

And yes, due to the duration of a standard home loan, doing it this way means you are going to be paying a lot of interest - a 20 year home loan means you will pay around double the purchase price of the house after you factor in the interest.

Demystifying Credit Scores - An Easy To Understand Guide

Time to check the scoreboard

Your credit score is a pretty important number.

Why?

Well a good credit score not only influences whether or not you will get any finance you are looking to take, but it also plays a big role in determining the interest rate you get for that finance.

Interest Rates - Why Fixed Is Broken

"Breaking" down fixed versus variable
interest

When signing up for a loan, you are usually quoted an interest rate relative to the prime rate. For example, you may be offered a rate of prime plus 0.5%. This is known as a variable rate – because the rate will vary according to the prime lending rate.

Sometimes you are also given the option of a fixed interest rate. With this option, the rate will not change, and is fixed for the duration of the loan (or, if the loan is longer than 5 years, then the fixed rate is usually fixed for a period of 5 years). With a fixed rate, even if the prime lending rate is increased or decreased, the repayment amount will remain unchanged.

Home Loan Gymnastics - How Bendy Is Your Bank?

Which home loan providers are willing
to reduce the weight of the ball and
chain?

A few weeks back I wrote a blog post on how I managed to score R83k by sending a simple email to my bank requesting an interest rate reduction on our home loan. As expected, many of the blog's readers, being the money savvy type and not shy to hack their way to a reduced interest bill, got in on the action and contacted their home loan providers with the same request.

These reader's requests were met with varying degrees of eagerness by the banks, ranging from the banking talk equivalent of “we so glad you asked, here’s some free money ” to “kindly f-off!”

Debt – Interest Isn’t The Worst Part

Never pick up heavy percentage
symbols. 

People who read this blog are generally pretty money savvy (and if not, hopefully will be soon). So I’m pretty sure that you already know how bad compound interest working against you can be (for example, how it can result in you buying a car for your bank.)

And then of course there is a lot to be said about about the opportunity cost – if those debt repayments were invested instead, it could leave you with a tidy sum of money as compound interest pushes you forwards instead of holding you back. So I won’t bore you with the numbers because you already know the dismal picture they paint.

How One Email Saved Me R83,000

An email I would love to receive! 

I am feeling pretty chuffed with myself - not only because this post's title is probably the most click-baity one I have ever come up with, but because I recently managed to score myself around R83,000. And with only a tiny amount of effort.

In fact this was probably the single most worthwhile thing I have ever done in terms of the time and effort to reward ratio. And all while taking absolutely 0 risk!

The Ugly Side Of Home Loans

Home loans - not always fun!

Home loans are sneaky beasts – on the one hand they enable many to reach their dreams of home ownership, but on the other hand you can be sure that the banks aren’t dishing them out for free - there is some good money to be made off of Joe Consumer's home ownership aspirations. The interest bill on a home loan usually ends up being in the millions.

And although my Early Retirement Plan dictates that I will be putting almost all my discretionary savings into equity investments, the numbers in this article have certainly given me some food for thought…

The Easiest Way To Pay Off Your House In 15 Years

It's Home-Loan-Free 'O Clock

This is not an article about finding an extra couple of hundred bucks and putting it into your bond each month. It is not about moving your debit order from the 1st to the 25th, or putting half your annual bonus into your home loan. And it also has nothing to do with allocating a portion of your annual increase towards your bond each year.

A Reader's Story - Debt Free

Winning at Scrabble finances 

A few weeks ago I opened my inbox and found an email titled “Debt And DSTV Free!”

The email was from one of the blog's long time reader's, Chris, and he was happily wafting his new found debt freedom in my face. (You may remember Chris as the guy who sent in the query which resulted in the "Pay Off Bond Or Invest" post - I guess it is obvious now which way he went.)

How To Buy Your Bank A Car

Zero shirts sold. 

Wait, what?

Why would you want to buy your bank a car, that's just stupid?

You right, it is stupid. Yet millions of South Africans do it! And in fact a lot of people will buy their banks 3 or even 4 cars over their lifetime.

It seems to indicate that despite all the moaning and groaning, South Africans actually love their banks. A lot!

Improve Your Chances Of Getting A Home Loan

Homeloan please! 

I have been in the very fortunate position to have made two successful home loan applications in my recent past. (I think I have to plant around 5 trees to make up for the amount of paper consumed as a direct result of this). So I guess I am what you may call  "somewhat experienced" - an orange belt in homeloan application karate?

The two applications have taught me a lot, and so I thought I would share some war stories and lessons learnt while getting beat up by the Banks (they are all black belt you know).

Attacking Debt

Looks like someone had one too many.

Debt - the wine stain on your personal finance carpet, the pimple on your teenage wealth plan's face and the vomit on your budget's clean white shirt. Yuck! 

The fact that you are reading this means you are already showing an above average interest in your personal finance and a willingness to do better, so I suspect I may be preaching to the choir. But still, it must be said - Debt is Bad!

Using Your Home Loan To Pay Off Your Car

A house squashing a car - is that the
best I could come up with? 

Almost all of us have heard of the benefits of paying off the debt with the highest interest rate first - and it is in fact a very good strategy. But some people take this one step further - since home loan interest rates are generally lower than car loan interest rates, you hear them proudly proclaiming "I have paid off my car using my home loan access facility, I am going to save so much interest!" But are they really? Is it a good idea to use your home loan to pay off your car? It can be, but there is a very important aspect which you need to consider.