Financial Help

Home Page Forum Budgeting and Debt Management Financial Help

This topic contains 4 replies, has 3 voices, and was last updated by  Maya Fisher-French 9 months, 1 week ago.

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  • #10474

    FBD
    Participant

    Hi Maya

    If you can give me some advice it would be great.

    I currently have 2 loans which I payback in total R6500 a month for the next 5 years.
    I also owe about R80k on a credit card.

    I own a bond free property worth about R2m.

    Is there a way I can pay off my loans and CC using my property.
    Or could I buy a new property and get a bond for more than the property is worth to pay off the loans.

    Thanks in advance.

    FBD

  • #10475

    It could make good financial sense to settle your debts with any available credit on your home loan BUT it comes with a serious health warning. Firstly the only way it makes sense is if you increase your mortgage repayments by the amount you are currently paying towards those loans. Otherwise you are extending that debt over 20 years which doubles the repayment total. Secondly, you HAVE to address the issue of why you got into short-term debt in the first place. If you just start using the credit card again and take out more loans you will just get into more debt and find yourself asking the same question again in a few years time.
    Buying a new property would not make sense unless you are seriously downsizing – there are huge cost implications in buying and selling property and you could find yourself worse off.
    You would need to find out from your bank how much credit you have available on your mortgage – it may also depend on the type of mortgage you have

  • #10536

    Monnye
    Participant

    Hi Maya

    i am turning 35 this year,i have RA that i started in April 2009 with R500 at 5% annual increase. The portfolio only grew 12% above the actual premiums i paid. So now i have R2000 that i would like to save, so i am wondering if i should be looking into topping up the current RA which is at R900 or should i be looking for something else or even another financial institution? i also have TFSA with FNB as a cash account should i also look into another product for TFSA where i can get better interest?

  • #10537

    Monnye
    Participant

    Hi Maya

    i am turning 35 this year,i have RA that i started in April 2009 with R500 at 5% annual increase. The portfolio only grew 12% above the actual premiums i paid. So now i have R2000 that i would like to save, so i am wondering if i should be looking into topping up the current RA which is at R900 or should i be looking for something else or even another financial institution? i also have TFSA with FNB as a cash account should i also look into another product for TFSA where i can get better interest?

    thanks in advance
    Monnye

  • #10540

    I am assuming you mean that the total return is only 12% above what you invested? The first thing to check is what portfolio you are in. An RA invests in underlying portfolios and it could be that the portfolio is highly conservative and invested mostly in cash and bonds.
    Another thing to check is the fees – high fees can reduce your return by at least 2% a year.
    You probably have an adviser on this product so they need to answer these questions
    Certainly get to the bottom of the performance issue before you add any more money. There are many good low cost RAs in the market that you can invest in directly.
    In terms of TFSA – these are not really for cash investments but rather for long-term growth so it would make sense to start investing in a growth TFSA such as offered by SatrixNow or Easy Equities.

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