Hello and welcome to our very first issue of PowerNews!

PowerNews will be sent to you 4 times a year (Winter, Spring, Summer and Autumn). The goal of each issue is to provide you with money saving tips and motivational content. It is not our intention to fill your mailbox with useless spam, but rather to provide you with valuable insights about home loans, property and personal finance. However if you would prefer to unsubscribe please reply to the email address at the bottom of this email.

We look forward to building a relationship with you.

PowerBond recently conducted an internal audit of the savings that we have provided to our clients and we are extremely proud of the results. 

Having launched in February 2006 we have processed more than 500 applications for home loan finance, our average loan size is R700 000 and best of all the survey revealed that we have so-far saved the public more than R2,5 Million in attorney bond registration fees.

Remember most of South Africa’s bigger mortgage originators do not offer to pay your attorney bond registration fee!

So come to us directly and because we don’t have to pay a “bond referral commission” to a third party - we give you the benefit by paying your attorney bond registration fee.
This saves you R8 000 on a R1 Million Rand bond.

Pay your loan off quicker with fortnightly or weekly repayments
Converting your monthly repayment into two fortnightly or four weekly payments can reduce the term of your loan in two ways:

• as there are more than two fortnights or four weeks in every month, dividing your original monthly repayment into two or four means you actually pay more over the course of a calendar month.
• when interest is calculated daily, the more frequent repayments result in less interest being charged to your loan over the course of a month. This is a smart way to save!

Click here to use our Additional Payments Calculator

The new national credit act came into effect from 1 June 2007, it replaces the “outdated” Usury Act. In a nutshell it means that the bank may not approve home loan finance to you in a reckless manner, as they face a hefty fine of 10% of their annual gross profit.

How will it work:

(Out with the) OLD:
I can spend no more than 30% of combined gross (before tax) monthly income on total bond repayments.
I earn R10 000, I can pay R3000 on a home loan, I can qualify for a bond of R280 000.
(In with the) NEW:
Once all my pre-existing fixed monthly debt payments as well as other living expenses have been met, whatever is left, can be used to spend on my home loan instalment.

Why the change?:

With South Africa’s ever increasing debt ratio, consider the following scenario:

Two home loan applications, both have a total combined gross monthly income of R20 000.

• The first applicant has two credit cards, a personal loan, vehicle finance and various instalment sale transactions.
• The second will only have a monthly bond repayment as their fixed monthly commitment. Their car is paid for and they have no instalment sale transactions or overdrafts/credit cards.

Well as you can imagine it is not really fair to qualify both applicants in the same way. This is where the new NCA comes into play. It will turn the focus more onto the disposable monthly income, after all expenses have been paid.

The good news:

The Banks are in the business of lending money and they want to approve your home loan application. If you can prove affordability of the home loan, whereas in the past you were limited to the 30% rule, you could now (if you have little other debt) qualify up to 40% or 50% of your gross monthly income.

Important
Being NCA compliant, the banks now need to do thorough credit bureau checks on all your existing accounts. If your declared monthly expenses do not match up to what the national credit bureau has recorded for you on their system the bank will reject your application as Non NCA compliant. Previously you could declare a general clothing expense for example of R200 per month, you now need break it down into Woolworths R100, Edgars R100. More emphasis is being placed on any existing home loans you may already have. One of the main features of the new NCA is that all the banks need to form a joint home loan register to which they already have ready access.

So tell your PowerBond consultant the full story and we will advise you accordingly.

• Remember, we pay you R500 (after bond registration) for referring us the name and a phone number of anybody you know who requires a home loan from R200 000-R500 000.
  AND
• R1 000 (paid on bond registration) for referring a client to us who requires a bond of over R500 000.

The person you refer will obviously still receive the excellent PowerBond service and the benefit of their Attorney bond registration fees paid for.

Certain conditions do apply, so phone your PowerBond consultant with the name and number to dicuss, or send an email to info@powerbond.co.za

Tell a friend about PowerBond, save them some money and earn some money yourself.

So spread the word……...and have a PowerDay, see you in Spring!

Dave, Charlotte, Annemarie and the PowerBond team