select
|

Don’t let a holiday splurge delay your dream

With just a few shopping days left before Christmas, consumers who hope to buy a new home next year should be keeping a tight rein on their spending.
 
That’s the advice of Richard Gray, CEO of Harcourts Real Estate, who says that holiday shoppers wordwide are known to spend between 15 to 30% more than they had originally planned on gifts, holiday accommodation and food.
 
“But while this would be great for SA’s hard-pressed retailers this year, festive season extravagance could hamper your chances of getting a home loan when January rolls around.”
 
Because your credit record is so important in obtaining a loan, those who are planning a home purchase early in the new year should also definitely refrain from opening any new store accounts at this time for major purchases like furniture or large appliances. They should also be very careful not to max out their credit cards during the holidays, he says.
 
“And they should absolutely not be tempted to take a holiday dip into any savings they have already accumulated for a deposit on a home or transfer costs. Cash is always short supply when you buy a new home.”
 
To help potential homebuyers stay on financial course this holiday season, Harcourts has the following suggestions:
* Stick to a holiday budget. Write down who you're buying for and how much you plan on spending – and stick to your list when you go shopping.
* Try to avoid shopping at the last minute, especially for gifts and party food. The stress will lead you to buy whatever's easiest, not most economical.
* Pay off any holiday debt immediately in January. Try to limit credit card use during the holidays, but clear it completely once you receive your first statement of the year.
 
“And next year,” says Gray, “once you are settled in your new home, you should consider a festive / holiday savings plan in which you set aside a certain amount of money each month specifically for your festive season spending.
 
“That way, you’ll be able to put your bonus or 13th cheque straight into your home loan account, and start reducing your bond repayment period – which will of course generate huge savings on the ultimate cost of your home.If you pay R10 000 off a R1m home loan, for example, you will cut about six months off your 20-year repayment period and, at the current home loan interest rate of 9,25%, save more than R52 000 worth of interest.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK