We were in high school together many moons ago so when she contacted me to let me know that her husband lost his job due to Covid-19 and she was worried that they didn’t have money to send their kids to varsity next year, I did my best to see how I could help. She had been taking personal loans to pay school and varsity fees and she had reached her capacity – she could not even afford to pay her current debts easily and she could not borrow more money for varsity fees. When I looked at her credit report, I shook my head – I didn’t see how she could get out in time to be able to raise money for varsity fees. She had 9 debts and one of them was for food. She also had clothing store accounts and then she also had the debts as shown on the table below. I gathered all the info I needed and started making recommendations. I told her that we had to at least get rid of 5 of the debts before we could refinance her home. I summarised her problem as follows “your problem is that you have too many debts and they are all short term, expensive debt that also have credit assurance so you are paying far too much in monthly instalments. You must find R48 000 somewhere so you get rid of the 5 smaller ones asap then give me a copy of that title deed so I can raise cheap money for you. If you had a home loan of R300 000 at 8%, you would be paying about R2 500 in monthly instalments & you would not be under so much stress”.
We got a copy of her Astute report and thankfully, we found R30 000 there and she got rid of 3 of the smaller debts. I took a chance and told her to borrow money from her stokvel and to promise them that she was going to pay the money back with interest before the end of the year. At this point, I knew she had to succeed otherwise she would also have a fallout with her stokvel. The first 2 applications we did to refinance were declined and in the end, we settled for about half of what she wanted at R600 000 but I am happy to report that all the debts are gone and she now has an extra R10 887 monthly. The contractual home loan repayments are just over R5000 but she is paying back R6 500 so that she can pay off the home loan in about 9 years and still enjoy a debt free retirement. The kids are going to varsity in 2022 and there is enough money to pay the fees and to builda bachelor flat in their backyard to earn rental income.
She is one of my success cases of the year and many others are too intimidated and scared to even start. Some feel that paying me R5000 for the advice is too much and they prefer to go it alone. The R5000 she paid me to advise her is nothing in comparison to what she has gained.
Below are more topics that I covered in the November webinar.
Managing your home loan
22.Why it is a good idea to pay extra into your home loan
23. What is an access bond & how to use access bond to your advantage
24. Is it a good idea to fix your home loan rate?
25. How can I pay off my home loan < 20 years?
26.Is it a good idea to take a 30 year home loan?
27.Is it a good idea to switch a home loan to another bank?
28.Why I recommend that you do NOT close your account & take your title deed when your home is paid off
Making the most of your home loan
- What is a further bond & is it a good idea to take one?
- What is a re-advance loan & is it a good idea to apply for a re-advance loan?
- What is a refinance loan?
- How can I use my home loan to pay off debt? Is this a good idea?
- Can I use my home loan to pay school / varsity fees?
You can order a series of 4 podcasts lasting a Total of 1 hour and 30 minutes for R75. We are preparing an Ebook and we will package this with the podcast in 2022 and the price will therefore be going up
So if you have debts and you are willing to pay R5000 to get advice on how to get out, you can email us at email@example.com
Please note that if you are already under debt review, it is too late and I cannot get involved